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TAIPEI, Dec 2 (Reuters) – China’s ICBC (1398.HK)
(601398.SS) is in talks to buy a stake in Taiwan’s Cathay
Financial (2882.TW), sources familiar with the matter said on
Wednesday, in a deal that could be worth more than $3 billion.
[ID:nHKG137367]

Taiwan and China signed a financial services pact last
month covering financial supervision and allowing banks to tap
both markets by opening branches.

The issue of most concern to investors — details for
Taiwanese and Chinese financial firms investing in each other
– will be discussed in a free trade pact, or the so-called
economic cooperation framework agreement (ECFA).

Taiwan aims to sign the ECFA early in 2010, the government
has said.

Here are some of the Chinese firms looking to set up
branches in Taiwan or buy a stake in their Taiwanese
counterparts following the agreements.

* Bank of China (601988.SS) (3988.HK), the country’s
biggest foreign exchange lender, said it was ready to open a
branch on the island and will apply for regulatory approval as
soon as possible. “Bank of China hopes to and is capable of
being part of the first batch of mainland commercial banks to
open outlets in Taiwan,” spokesman Zhao Rong said in a
statement last month. [ID:nPEK201714]

* Other major state-controlled lenders, including
Industrial and Commercial Bank of China (601398.SS), Bank of
Communications (3328.HK) and China Merchants Bank (600036.SS),
are also planning to set up branches in Taiwan, analysts said.

* Beijing Bank (601169.SS) said it would accelerate the
process of setting up a branch in Taiwan and is seeking
Taiwanese partnerships on lending to small and medium-szied
businesses, Taiwan media have reported. * Among Taiwanese
financial firms that could attract stake investments by Chinese
firms along with Cathay Financial are Fubon Financial
(2881.TW), Taishin Financial (2887.TW), Chinatrust Financial
(2891.TW) and Sinopac Financial (2890.TW), analysts said.

* China Galaxy Securities Co, the largest mainland broker,
has said the company will apply to set up branches here and is
looking for tie-up opportunities with Taiwan firms, according
to Taiwan media reports.
(Reporting by Faith Hung; Editing by Lincoln Feast)
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