Tue, Jul 21, 2009 - Page 12 News List

Fubon planning to increase its stake in Xiamen Bank


Fubon Financial Holding Co (富邦金控) plans to increase its stake in China’s Xiamen City Commercial Bank (廈門商銀) after a cross-strait accord on financial services is signed.

“We plan to increase our stake in Xiamen Bank after regulations are changed,” Victor Kung (龔天行), president of Fubon Financial, said by telephone yesterday.

He declined to say how much Fubon Financial would buy. Under existing rules, a single foreign investor can hold as much as 20 percent of a Chinese lender.

Taiwan and China are poised to sign agreements allowing more investments in each other’s banking, insurance and securities industries, after agreeing on a broad framework for cooperation on April 26 in the third round of cross-strait talks.

Fubon Financial in November gained China’s approval for the Taiwanese company’s Hong Kong unit to buy a 19.99 percent stake in Xiamen Bank.

However, the company rejected a Chinese-language Economic Daily News report that it plans to raise its stake in Xiamen Bank to 50 percent. The report added Fubon Financial is planning to invest directly in the lender, instead of buying shares through its Hong Kong subsidiary, citing people familiar with the situation that it didn’t identify.

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