Two features, however, do make them attractive investments. First, unlike the state or newly privatized banks, they are not burdened with unprofitable loans made for political reasons under the KMT regime. Second, they are eager to innovate technologically and leap into uncharted new markets such as Internet and mobile phone banking. In Taiwan's banking sector, youth is definitely an advantage as it offers freedom from the shackles of both tradition and shady political pasts. Wanna Matanachai thus recommended four new banks and suggested that investors avoid the older and larger established banks.
Taiwanese banks are popular with foreign institutional investors.
As of July 18, foreign investors owned 32.28 percent of Sinopac, 13.8 percent of Taishin, 12.2 percent of Chinatrust and 8.71 percent of United World Chinese Commercial Bank. After Taiwan enters the World Trade Organization, more foreign investment is likely, and some of Taiwan's best-performing private banks may be acquired by foreign banks. Taishin has been the most aggressive of Taiwan's private banks to seek foreign capital. The stock is also sold on the Taipei stock market. For investors interested in a technologically innovative bank, the present may be the best time to get on the ground floor.