Taiwan-based Fubon Financial Holding Co (Fubon Financial) has bought up to 19.99 percent of Xiamen City Commercial Bank (XMCCB) through its subsidiary in Hong Kong, making it the first Taiwan-based financial institution to indirectly invest in the mainland.

XMCCB finished its capital increase on Nov 20 and introduced Fubon Bank (Hong Kong) Ltd, the subsidiary of Fubon Fnancial, as its strategic investor. Now, XMCCB's board of directors are composed of 11 directors, including three from Fubon Bank. Fubon Bank's Gao Chaoyang has been nominated as president of XMCCB.

The new management team said XMCCB would gradually set up branches in Taiwan and provinces with large Taiwanese businessmen populations, such as Fujian, while seeking opportunities to go public.

After this round of capital increase, the net capital of XMCCB may be worth over 1.1 billion yuan (US$161 million) at the end of 2008, while the capital adequacy ratio may be more than 10 percent, according to Wu Shiqun, the bank's chairman.

China Business News reported on Dec 23 that Taiwan-based Fubon Securities Co and Fubon Insurance Co had submitted applications to the mainland regulators to set up a representative office and a wholly-owned property insurance company respectively in Xiamen.

(China Daily December 23, 2008)