TAIPEI (Reuters) - Mega Financial (2886.TW), Taiwan"s No 4 financial holding firm, will be looking to take a controlling stake in a Chinese commercial bank after China and Taiwan sign a trade agreement, Mega"s chairman said on Monday.
Chairman Wang Rong-jou did not give a specific target in remarks to reporters at a business luncheon. Taiwan media have said Bank of Communications (3328.HK) (601328.SS), China"s fifth-largest lender, may be a possible candidate.
"We will pick up a specific partner before ECFA is signed, said Wang. "The targets we are looking at have capital of T$20 billion to T$30 billion ($623 million-$934 million)."
China and Taiwan are on track to sign an economic cooperation framework agreement (ECFA) later this year that would slash import tariffs and open the banking sector, bringing the export-reliant island and economic powerhouse China closer together.
Taiwan banks" returns on equity have been among the lowest in Asia for years partly due to stiff competition, and they are looking for growth opportunities in the mainland.
However, while trade ties have improved, distrust still lingers between the former political rivals and cross-strait banking deals are particularly vulnerable to political concerns.
(Reporting by Rachel Lee and Faith Hung; writing by Jonathan Standing; Editing by Jacqueline Wong)
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