Taiwan’s bank problem for companies expanding abroad
Hardly a day goes by without Taiwan’s technology industry being courted by foreign governments. As the west seeks to secure its supply chains against disruptions and the growing power of a rising China, the politically-isolated country — home to roughly 90 per cent of the world’s advanced chip production — has gained a seat at the table.
But back home, a major chunk of the economy dances to a very different tune. Taiwan’s financial sector is still overbanked despite a 20-year-old effort at consolidation with some 38 domestic banks. Local family clans and government-controlled institutions continue to call the shots.
That reality has been brought into sharp relief by the collapse of the proposed merger between local financial holding company IBF and Entie, a domestic bank owned by private equity fund Longreach, which is based in Japan and Hong Kong. The deal valued Entie at NT$33.7bn ($1.08bn).
This story originally appeared on: Financial Times - Author:Kathrin Hille
