Bank of China, ICBC consider Taiwan bank stake-paper

TAIPEI, Feb 6 - Bank of China <601988.SS> and ICBC <601398.SS> are interested in acquiring a stake in Taiwan's Mega Financial <2886.TW>, the Economic Daily reported on Friday, sending Mega stocks to a three-week intraday high.

An investment from Bank of China <3988.HK> or Industrial & Commercial Bank of China <1398.HK> would make them the first Chinese banks to enter Taiwan, ahead of a landmark agreement expected later this year that would allow such investments, the paper said, without citing sources.

Under the agreement, expected as soon as March, China and Taiwan will open their financial services markets to each other.

Executives of the Chinese lenders visited state-run Mega during their visit to the island in November, the paper said.

A senior Mega executive said his company did not rule out the possibility of buying a stake in the Chinese banks to help it tap the huge China market, it said.

A Mega official could not be immediately reached for comment.

In midday trading, shares of Mega rose as much as 5.7 percent to T$10.35, their highest intraday level since Jan. 13 and beating the main share index's <.TWII> 2.86 percent jump. ($1=T$33.6)