(20 June 2012 – Taiwan) Cathay Financial Holdings is to invest US$1.3 billion (A$1.2 billion) to acquire mainland Chinese banks.The Taiwan-based firm has not specified probable targets or partners, or any details on how or when the money would be raised.
Analysts said a probable target would be Wenzhou Commercial Bank of China in Zhejiang province.
Cathay company president C.K. Lee said: ‘The development of Taiwan-China ties is growing very fast. We want to seize every opportunity we can get.’
Taiwanese financial institutions, struggling against the disadvantages posed by its crowded home market, have been exploring ways to tie up with Chinese banks to get faster access to the huge mainland market.
Trade relations between both rival states have improved to their best level in 60 years. Banking ties, however, have been slower than those of manufacturing industries due to concerns from regulators on both sides.
Taiwan recently gave its approval for the Bank of China and the Bank of Communications to establish a branch each in Taipei, the first by the Chinese banks on the island.