Tsai: In the flow

When Taiwan’s Fubon Financial Holding bought 75 percent of Hong Kongbased International Bank of Asia early last year, the general consensus was that Daniel Tsai, Fubon’s chairman and co-CEO, had found a clever way into China’s banking market.

To hear Daniel Tsai tell it, it’s the journey that matters, not the destination. When Taiwan’s Fubon Financial Holding bought 75 percent of Hong Kongbased International Bank of Asia for $415 million early last year, the general consensus was that Tsai, Fubon’s chairman and co-CEO, had found a clever way into China’s banking market. But although the mainland may be on Tsai’s radar, right now Fubon’s “game,” he says, is to “sit on top of the money flow” between Taiwan and China -- and that river runs through Hong Kong. “You don’t have to be in China,” he says. “Taiwanese businesses in China still keep most of their money in Hong Kong.”

China may soon feature more prominently in Tsai’s plans: In 2007, Hong Kong banks with $6 billion or more in assets will qualify for relaxed entry requirements to the Chinese market; other foreign banks will need assets of $20 billion. IBA’s assets currently total $4.5 billion, but Tsai, 49, who jointly runs Fubon with brother and co-CEO Richard, 47, is confident that IBA will hit the magic $6 billion number within two years. IBA is already scouting for potential China acquisitions.

Even if IBA gains early access for Fubon -- Taiwan’s second-biggest private bank, with total assets of $46.3 billion -- Tsai wonders how “a Taiwanese institution is going to compete with the global giants who are going there, and also the local giants.” While he works on the problem, he will use IBA to build a China-related customer base -- and build his bank’s critical mass.

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