Taiwanese banks, having slowly developed a California presence in recent years, are suddenly picking up the pace.

FCB Taiwan California Bank is slated to open its doors in the Southern California town of Alhambra on May 20. The state-chartered bank, the first such venture by a Taiwanese bank, is backed by $30 million in capital from Taiwan's fourth-largest bank, First Commercial Bank.

And Los Angeles-based Far East National Bank hopes to be acquired shortly by Taiwan's Bank Sinopac-becoming the first U.S. bank to be sold to a Taiwanese one. The Federal Reserve is currently considering the $85 million deal, unveiled last October, for the $500 million-asset bank.

Although U.S. expansion by Taiwanese banks isn't new-at least 10 have opened branch or agency offices in California over the past six years- observers say the latest moves show a newfound interest in direct investment.

"This is a good sign that more capital is coming in," said Dominick Ng, president and chief executive of $1.6 billion-asset East-West Bank in San Marino, Calif., the nation's largest Asian-American bank. "It further legitimizes California as the hub of the Pacific Rim, and that is very positive."

The recent surge in interest by Taiwanese banks is an outgrowth of several converging trends:

Taiwanese banking laws have been loosened in recent years to permit private ownership, leading to the formation of 16 new banks. At the same time, restrictions on overseas expansion by Taiwanese banks have been eased markedly.

Taiwan has become one of California's three largest trading partners, creating a need for banks that can serve companies doing business on both sides of the Pacific. "There's a lot of interest from the Taiwanese in doing business here," said Steven J. Didion, bank analyst at Hoefer & Arnett in San Francisco.

The Chinese ethnic community in Southern California is growing fast and quickly becoming more prosperous. Indeed, Mr. Didion noted, Southern California has the greatest concentration of Taiwanese outside of Taiwan.

"The Taiwanese banks have been looking at this market for quite some time," said A. Wade Francis, president of Unicon Financial Services Inc., a Long Beach, Calif., investment banking firm that works with many Asian banks. "It's a natural blooming of their economy and their regulatory structure. It just makes good economic sense for them to be able to come into this market."

To be sure, some Taiwanese banks are still pursuing the more traditional path to U.S. expansion by foreign banks-opening representative or branch offices. For instance, $41 billion-asset Land Bank of Taiwan recently received Fed approval to open a Los Angeles branch office.

But Bank Sinopac's planned acquisition is seen as the new model for expansion. The $5 billion-asset bank is considered "the most foreign-minded and most innovative of the new banks in Taiwan," said a Taipei-based analyst for a European investment bank, who requested anonymity. Sinopac's deal for Far East National Bank could spur "other banks to follow its path," this source added.

Already, observers said, other Taiwanese banks are seriously looking at buying ethnic community banks in this country. The analyst predicted that up to one-third of the 16 banks formed in Taiwan in the early 1990s could look to California for growth.

Buying an existing community bank, complete with domestic charter and franchise, would carry with it far more advantages than just opening a new branch, they said. Besides being cheaper, it would allow the Taiwanese banks to take more advantage of interstate branching and domestic deposit- taking powers.

Some bankers said a wave of an investment from Taiwan could also prove a boon to the more than 20 Chinese-American institutions and their communities in Southern California, who need the infusion of capital to fund their growth.

Stocks of several other major ethnic banks in California have already risen on such takeover speculation following the announcement of the Far East deal in early October 1996.

But another banker in the Southern California Chinese-American community said that further Taiwanese investment may not be forthcoming unless the Fed speeds up its application reviews.

He noted that it took nearly two years for the Fed to approve Land Bank's application for a branch office and First Commercial's application to launch its de novo bank.

Both applications were filed in the summer of 1995. Fed officials declined to comment on the turnaround time.

"That is one of the major reasons why there has not been more interest," the banker said. "But if Far East can actually get approved much faster, that concern may be no longer valid."

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