First Commercial Bank, Taiwan's second-largest financial institution, is planning to open a Southern California retail banking unit.
Gerry Y.G. Lee, senior vice president and general manager of First Commercial's Los Angeles branch, a wholesale unit, said his bank hoped to open the new retail unit, FCB Taiwan California Bank, before yearend after obtaining final approval from U.S. regulators.
First Commercial, with $35 billion in assets, already has three U.S. branches, in New York, Los Angeles and Guam. The branches focus on trade finance, fund transfers, lending, foreign exchange and loan syndications.
Mr. Lee noted that the bank's present U.S. branches, being restricted to wholesale banking, cannot take deposits of less than $100,000 or handle retail banking operations.
He said the U.S. retail unit will help the bank diversify and provide a broader range of services to customers. It will also be able to open branches in its own right.
First Commercial has already obtained approval from the Federal Deposit Insurance Corp. and the state of California, but is awaiting final approval from the Federal Reserve Board.
First Commercial, established in 1899, has 152 branches in Taiwan and 10 offices overseas. The wholly owned U.S. retail banking unit will have $30 million in capital and be based in Alhambra, close to several large Asian- American neighborhoods.
Nine Taiwanese banks operate in the United States, and several more have applied to U.S. regulators to open offices. Several groups of Taiwanese investors have also recently acquired or established local retail banking institutions.
First Commercial is the second large Taiwanese bank to apply recently to set up a retail banking unit in southern California, hoping to develop business with California's growing ethnic Chinese community.
China Trust Bank, which several years ago set up a New York State- licensed subsidiary, last year acquired the five-branch Trans National Bank of Monterey Park.
California's ethnic Chinese community has grown rapidly in recent years. Bankers estimated that there are now more than one million people of Chinese descent in California. The community is increasing by 40,000 to 50,000 people each year, they added.
"Our customer base is growing here, and that means we need to establish more offices here," Mr. Lee said.