Taiwan's Chinatrust eyes two China tie-up partners

TAIPEI, Oct 31 (Reuters) - Chinatrust Financial (2891.TW), Taiwan's top credit card issuer, said on Friday it is looking at two potential banking tie-ups in China, as the industry eyes opportunities in the fast-growing Chinese market.

Taiwan financial firms were banned from investing in Chinese banks until this year, when Fubon Financial (2881.TW) became the first player allowed to buy a stake in a mainland bank under relaxed government regulations.

Such investment is still difficult, but many believe that will change in the first half of next year when China and Taiwan are expected to sign an agreement governing oversight of cross-strait investments by financial companies.

Chinatrust spokesman Daniel Wu said his company was now looking at two potential targets in China. He said the targets were small- to mid-sized city or commercial banks but did not specify what kind of tie-up his company was looking at.

According to current Chinese law, overseas banks may buy no more than 25 percent of any Chinese lender, though individual overseas banks can only buy up to 20 percent.

Taiwan financial organisation have long complained that the prohibition on doing business in China, one of the world's fastest growing banking markets, puts them at a competitive disadvantage to global rivals such as Citibank (C.N), HSBC (0005.HK) (HSBA.L) and Standard Chartered (STAN.L) (2888.HK), which face no such restrictions.

Taiwan banks hope to use their expected entry to China to serve their Taiwanese business clients, which have collectively pumped more than $100 billion in investments, many in the manufacturing sector, into China over the last 20 years. (Reporting by Yvette Chen; Writing by Doug Young; Editing by Anshuman Daga)