Taiwan's Fubon to invest $1 billion in Chinese bank

Fubon, Taiwan's second-largest publicly listed financial group, said Thursday it plans to invest $6.45 billion yuan ($1.03 billion) to buy an 80 percent stake in China's First Sino Bank.

Fubon Financial Holding said in a statement it would spend $5.65 billion yuan to acquire the stake in the bank and would subscribe for new shares worth another $800 million yuan after the purchase.

The company said the deal, which needs regulatory approval in both Taiwan and China, would boost its profits and allow it to expand services to China-based Taiwanese companies.

Fubon became the first Taiwanese bank to invest in China after it acquired a 19.9 percent stake in Xiamen City Commercial Bank in late 2008 via the Hong Kong unit.

Shanghai-based First Sino Bank was the first bank to be jointly founded by Taiwanese and Chinese investors in 1997.

Longtime political rivals Taiwan and China in 2009 signed a package of agreements on better cooperation in banking, insurance and securities aimed improving ties.

The agreements are expected to make it easier for Taiwanese and Chinese banks to buy each other's assets, and to make it possible for Chinese to buy shares listed on Taiwan's stock market.