The world's largest lender, the Industrial and Commercial Bank of China (ICBC), is planning to purchase a 20% stake in Bank SinoPac of Taiwan worth approximately NT$ 18.7bn (or US$ 625 mn). This is the first foray by a Chinese bank into the Taiwanese banking sector. The proposed price is based on estimation of Bank SinoPac’s net asset value as of end of 2012.
ICBC announced on its website that it has reached a tentative agreement with SinoPac Holdings to acquire the latter's banking units, pending regulatory approvals from both sides of the Taiwan Strait.
The announcement to purchase a stake in Bank SinoPac came a day after the Taiwanese banking regulators indicated that it will loosen rules to allow mainland Chinese banks to invest in local Taiwanese banks up to 20%.
ICBC has already established commercial banking cooperative relationships with 39 local Taiwanese banks for interbank settlement transactions totaling US$ 70.3 bn last year.