Cathay Fin says to raise up to $1.3 bln for China growth
TAIPEI (Reuters) - Cathay Financial (2882.TW), Taiwan's top financial holding firm, will raise up to T$40 billion ($1.33 billion) to acquire rivals or build partnerships in China, its president said on Friday, as trade ties across the Taiwan Strait warm.
C. K. Lee, who was speaking at Cathay Financial's annual shareholder meeting, did not specify how or when the fund would be raised. He also did not say who the company is planning to partner with.
One possible target for Cathay could be unlisted Wenzhou Commercial Bank of China's Zhejiang province, local media have reported. Cathay officials were not immediately available for comment.
In March, Cathay said it would conduct a stock sale at home or abroad for the fund raising, but did not say what the proceeds will be used for.
Taiwanese financial institutions, long struggling with a crowded home market, have been eyeing ways to tie up with Chinese banks to get faster access to the huge mainland market. Cathay Financial currently has a life insurance joint venture with China Eastern Airlines (600115.SS) on the mainland.
"The development of Taiwan-China ties are growing very fast. We want to seize every opportunity we can get," Lee said.
Trade relations across the Taiwan Straits have improved to their best level in 60 years, though banking ties have been slower than those of manufacturing industries due to acute concerns from regulators on both sides.
Taiwan last week gave the nod for Bank of China (3988.HK) (601988.SS) and Bank of Communications (3328.HK) (601328.SS) to set up a branch each in Taipei, the first by the Chinese banks on the island.
Cathay shares ended up 1.6 percent on Friday, against the broader market's .TWII 1.1 percent gain.
(Reporting by Faith Hung and Chan Ching-yi; Editing by Muralikumar Anantharaman)