SinoPac Financial Holdings Co. Ltd of Taiwan would be selling off a 20% share of its banking unit. The buyer is Industrial and Commercial Bank of China Ltd at the cost of NT$20 billion.

The announcement was made by the Taiwanese bank and the purchase consists of 1.8 billion shares through a private placement to ICBC. ICBC is a strategic investor in its banks operations and would be the first time a Chinese bank would be investing in a Taiwanese bank.

This comes after the Taiwanese financial regulator has eased rules to allow Chinese banks to purchase larger shareholdinbgs in local banks. This would also allow Chinese firms to invest further in Taiwan's financial markets.

SinoPac has shareholdings valued at NT$20 billion or US$681 million. The deal would require approvals from both regulators on both sides of the strait and is a step further in the relaxation of rules to govern investments in the financial sectors of the two countries.