Standing out among competitors must be what Taiwanese banks are struggling with now. Internal competition is so fierce that they worry about return targets. The competitors’ clients tend to go to their previous service. So the banks are hungry of winning new deals and new names. Competing in the mainland is already giving a lot of pressure, shifting to South could be the solution.
They are changing their navigation to the South.
Southeast Asia gives the banks more confidence and determination to leverage the business away from Chinese risk. It is actually in line with Taiwan’s New Southbound Policy in 2016. They are bringing back the policy by actively lending in Southeast Asia.
Taiwan’s Financial Supervisory Commission (FSC) has approved seven offshore plans, four of them are for Southeast Asia. The shift to the South have begun. Mega International Commercial Bank has set its sub-branch foot in Phnom Penh, the capital of Cambodia. This is a state-owned bank. Hua Nan Commercial for instance has gained approval to open a representative office in Jakarta. E. Sun Commercial Bank too opens representative offices in Bangkok and Ho Chi Minh City.
Apparently, this change of navigation benefits the small and mid-sized borrowers in Southeast Asia. The banks also take the leading role in loan syndications in the frontier markets of Cambodia and Laos. Bunch of deals follow. Southeast Asia banks have launched loans mandated to Taiwanese banks.
Among the many are Vietnamese financial services firms SSI Securities and Techcom securities. They launched a year loan for up to $200m. Happening in the same month, Bank of Lao PDR launched a $50m four year term loan. Last year in November, Acleda Bank, the biggest lender in Cambodia raised a three-year loan for $79m. A third Taiwanese loan banker argued that in order to win the competition among lenders, they are ready to play for the bookrunning and syndication of more deals in Southeast Asia.
