The Bank of Taiwan's plan to establish a unit in Lithuania would be a significant development in the country's banking sector, which is currently dominated by Scandinavian capital banks, LRT.lt and BNS, a Lithuanian newswire, reported on July 25.

The ties between Lithuania and Taiwan have strengthened considerably since late 2021 when the then Lithuanian government permitted the establishment of Taiwan's representation in Vilnius, functioning as a de facto embassy and causing relations with China to sour. 

As reported earlier this week, the Taiwan Commission has apparently given the green light to the state-owned bank's request to open an office in Lithuania, Paulius Lukauskas, head of Lithuania's Trade Representative Office in Taipei, confirmed to Verslo Zinios.

In its communication with local media, the Bank of Taiwan highlighted the importance of Lithuania's strategic location at the crossroads of Europe and Eurasia, which would facilitate leveraging business prospects in the Central and Eastern European regions and aid the bank's global expansion. Lukauskas indicated that other Taiwanese banks might be inspired to follow suit. 

A central bank official has now expressed confidence that the Bank of Taiwan could effectively compete with the major Scandinavian players already on the market. This move could diversify the financial landscape in Lithuania, potentially offering more competitive services and products to customers.

Given the predominance of Scandinavian banks in the region, the entry of a new player like the Bank of Taiwan may introduce fresh dynamics into the market. This could lead to increased competition, which might benefit customers through better rates and services.

This development aligns with broader trends of increasing international investment and cooperation in the Baltic states, potentially enhancing Lithuania's financial integration with global markets.

“We encourage the Bank of Taiwan to provide as diverse services as possible in Lithuania,” Lukas Jakubonis, chief business development officer at the Bank of Lithuania, told BNS in a comment. 

The Bank of Taiwan currently has 11 representative offices, including in the US, Hong Kong, Japan, Singapore, the UK, South Africa, and Australia.

“Lithuania offers an excellent opportunity to provide financial services to both individuals and organisations. We have hope that the Bank of Taiwan can successfully compete with major banks in our country,” he said, BNS reported.

According to Jakubonis, the Bank of Lithuania has been in talks with the Bank of Taiwan and is aware that it has received approval from its supervisory authority to establish a bank in Lithuania.

The central bank is now waiting for an official notification from the Taiwanese authority, which will reveal more clarity on the bank’s plans, the official said.

Finance Minister Gintare Skaiste said on July 24 that the Bank of Taiwan is likely to focus on business clients in Lithuania, but the specific nature of its operations will become clearer once it receives a license from the Lithuanian central bank, LRT.lt and BNS stated.