Taiwan's CTBC Financial, China CITIC Bank cancel deals
By Faith Hung and Shu Zhang
TAIPEI/BEIJING (Reuters) - CTBC Financial Holdings 2891.TW, parent of Taiwan's top credit card issuer, and Chinese state-backed lender China CITIC Bank Corp (601998.SS: Quote) have canceled investments in each other amid fresh cross-strait political tensions.
It is the first deal collapse since pro-independence Democratic Progressive Party (DPP) leader Tsai Ing-wen became president of Taiwan in May, but China CITIC Bank's president said there was no political aspect to the decision.
"There is not a single political element to it. We are a commercial bank. We can’t play a leading role in politics," Sun Deshun told a press conference in Beijing.
"This was mainly due to financial regulatory policies in the two locations. And we couldn't reach agreement on some commercial terms."
CTBC and China CITIC Bank said in a statement that both parties had agreed to terminate the deal as it had been more than a year since they signed the contract.
Taiwan's Financial Supervisory Commission Vice Chairman Kuei Hsien-nung said CTBC did not submit applications for the deal as China CITIC Bank had failed to meet a key regulatory requirement.
The requirement is that Chinese banks which invest in Taiwanese banks must have branches in OECD countries for more than five years, he said.
CTBC did not immediately respond to requests for comment. Continued...