Fubon Financial approved to invest in mainland bank

Fubon Financial Holdings Co. Ltd., the leading and most prominent financial holding company in Taiwan, has won the approval from the Financial Supervisory Commission to invest in a mainland lender, according to the island's top financial regulator.

The Taiwan-based company intends to buy a 19.9% stake in Xiamen City Commercial Bank through its Hong Kong unit, sources disclosed. However, the deal still needs the final approval from the Investment Commission of the Ministry of Economic Affairs.

However, spokesman from Fubon's subsidiary in Hong Kong said it has not entered into any agreement with a mainland bank.

On March 12, the Taiwanese authorities announced that local banks can acquire as much as 20% stake in mainland counterparts via their overseas units. Fubon Financial is the first banking company that received such permission.