Taiwanese banks to ramp up overseas expansion as regulation eases

Overseas investment limits were eased early this year from 40% of paid-in capital to 40% of net worth.

According to BMI Research, the Taiwanese banking sector is going through a series of reforms in 2015 that we believe will see local lenders branch out beyond the island's borders over the coming years to further consolidate the market's current surge in lending activity.

Here's more from BMI:

Back in January, the Financial Supervisory Commission (FSC), the domestic regulator, saw its proposed amendments to the Banking Act brought into law. The changes will see the streamlining of the overseas acquisitions process, by easing overseas investment limits from 40% of paid-in capital to 40% of net worth, along with the raising of the investment capital.

These two factors combined will serve to support the outward expansion of Taiwanese banks across the fast-growing market of the South East Asia region (most likely starting with China, where most leading Taiwanese banks already have branches).

Taiwan offers something different to a region undergoing a rapid growth in corporate hunger for capital. Indeed, one of the offshore resort's key strengths is that it can offer an alternative liquidity pool for companies in the region, although we expect the lion's share of firms to visit the island to raise funds to come from Mainland China.

More specifically, we expect the history of Taiwan's capital markets serving the technology industry to appeal to the wave of Chinese tech firms, which may find it hard to raise capital at home. Going forward, this puts Taiwan in a position to potentially become a tech fundraising hub as it looks to embed itself in the broader region.