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Taiwan bank joins in first cross-border yuan-syndicated lending
Central News Agency
2013-06-12 05:57 PM
Taipei, June 12 (CNA) Shanghai Commercial and Savings Bank (SCSB), a Taiwanese lender, said Tuesday that it has participated in a 150 million Chinese yuan (US$24.2 million) syndicated loan extended to a China-based financial leasing company. SCSB said the loan is Taiwan's first cross-border yuan-denominated transaction of this kind and was organized by three banks in Taiwan, Hong Kong and China. The other two lenders in the loan syndication are China's Bank of Shanghai and Hong Kong's Shanghai Commercial Bank, and the loan went to Chailease International Finance Corp. SCSB and its two banking partners are business affiliates that have cross-shareholding ties. Bank of Shanghai serves as the manager of the syndication, SCSB said. Chailease International, which was set up in Shanghai in 2005 and is now wholly owned by Taiwan-listed Chailease Holding Co., now operates offices in 17 major Chinese cities. Lin Chih-hung, a spokesman for SCSB, said that as Chailease International is expanding rapidly in the huge China market, it was necessary for the financial leasing firm to seek more funding sources in order to grow. He said this type of cross-border lending is expected to serve the company well, as offshore yuan-dominated loans are cheaper than domestic yuan-lending. However, he declined to disclose the terms of the loan to Chailease International. Lin said that as SCSB has close business ties with its partners in China and Hong Kong, the Taiwanese bank has turned very active in providing yuan-denominated loans after the local financial authorities in February lifted a ban on local banks conducting yuan transactions. As of the end of April, yuan-denominated loans accounted for about 25 percent of SCSB's total lending. In response to a request from its shareholders, Lin said, his bank has set up an evaluation committee to study the possibility of launching a listing on the Taiwan Stock Exchange or on the over-the-counter market. In the first five months of this year, SCSB posted NT$4.88 billion in pretax profit, up 22 percent from a year earlier, while the bank's net profit rose 29.46 percent from a year ago to NT$4.20 billion, with earnings per share of NT$1.13.

(By Kao Chao-fen and Frances Huang)

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