Industrial and Commercial Bank of China (ICBC) is in talks with Cathay Financial to acquire a stake in the Taiwan-based firm, Reuters reported, citing unnamed sources familiar with the matter. One source said that ICBC is interested in taking 20% of the island’s top-listed financial holding group, a stake worth US$3 billion based on Cathay’s market capitalization. Another source said talks remain in the early stages. ICBC and Cathay Financial declined to comment. While the purchase would make sense as part of ICBC’s global expansion strategy – the bank has spent more than US$6 billion on foreign acquisitions in the past two years – the proposal may not do much for Cathay Financial. Bloomberg quoted Nora Hou, an analyst at Deutsche Bank AG: "Fundamentally, Cathay doesn’t need the funds and there is no reason for them to sell a 20% stake."