TAIPEI: Fubon, parent of Taiwan's No 2 life insurer, plans to invest in a commercial bank and a brokerage house on the mainland, a top executive told Reuters yesterday.

Fubon Financial, Taiwan's No 5 financial holding firm, expects to post better profits this year than the NT$11 billion ($330 million) net profit it reported in 2008, President Victor Kung said at the China Investment Summit.

"If we invest in a mainland bank, we would be seen as a local bank, and that would give us advantages to expand faster than foreign banks there," Kung said.

"We are in talks with several partners," he said, declining to elaborate.

Kung was quoted on August 13th as saying that Fubon intended to increase its share in Xiamen Commercial Bank by the end of the year.

Fubon Bank (Hong Kong), a division of the Taiwan-based company, currently holds a 19.99 percent of Xiamen Commercial Bank.

Fubon Financial is Taiwan's first financial holding company that had bought a stake in a mainland lender via a third destination.

Kung also was quoted on August 6th as saying Fubon plans to invest in Fujian province after Taiwan and the mainland reach a financial accord.

Kung also said the Taipei-based firm hoped to obtain approval from the mainland government by the end of 2009 to establish a property and casualty insurance company in Xiamen, a key city in cross-Straits relations.

However, Fubon doesn't intend to expand into bigger cities on the mainland since it cannot compete with local companies, said the president.

Reuters

(HK Edition 09/02/2009 page2)