Cathay Financial sais it will tap into China’s asset management market this year. This is the new ambition to expand in mainland China and illustrates how trade ties are warming between the two political foes.
Cathay Financial, which late in April signed MOUs with three Chinese banks including Bank of China Ltd , planned to set up a fund joint venture with a Chinese partner, President C.K. Lee told reporters.
The company also planned to seek business from qualified domestic institutional investors (QDII) to manage their investments in Taiwan stock market, he said.
Business ties across the Taiwan strait have improved to the best level in 60 years, with the signing of a landmark free-trade pact called the economic cooperation framework agreement (ECFA).
Cathay would have total assets under management of about T$370 billion ($12.8 billion), above the $10 billion minimum required by the Chinese authorities, after the firm combined those of its fund and life insurance arms, Lee said.
Cathay’s banking business in Shanghai started earning a profit shortly after opening. The firm said it expected the shanghai branch, its only one in China so far, to increase loans and deposits in the second quarter from current levels.
Cathay said it would be looking at the possibility of merging with targets if they could help accelerate expansion and earnings growth on the mainland.
“We’ll carefully evaluate if we find a target that can help us expand in the Chinese market,” said Lee.
Shares of Cathay ended up 1.37 percent on Wednesday, while the broader market was flat.
Source : Reuters
