THE Singapore unit of the Industrial and Commercial Bank of China yesterday started clearing offshore yuan trading to facilitate the use of the yuan in cross-border trade and investment in a latest boost to globalize the currency.

Financial institutions in China and Singapore can now conduct cross-border yuan settlement for their clients through local clearing banks as well as agencies, the People's Bank of China said in a statement on its website yesterday after signing a clearing agreement with ICBC Singapore.

''Signing of the documents will help companies and financial institutions use the yuan to conduct cross-border trading, and further facilitate and liberalize trade and investment,'' the statement said.

In Singapore the managing director of the Monetary Authority of Singapore, Ravi Menon, said the range of yuan-denominated product offerings is likely to expand as regional corporations raise yuan financing through bond issues and equity listings to tap on the strong investor base in the region.

As a gateway to China's trade partners in southeast Asia, Singapore started yuan business in 2011 and as of June 2012 held yuan deposits of 60 billion yuan (US$9.7 billion), behind China's mainland and Hong Kong.

Companies have already begun selling yuan-denominated bonds to investors in Singapore, and the Singapore Exchange in June last year announced it was ready to quote, trade, clear and settle yuan-denominated securities

The PBOC named ICBC as the clearing bank for offshore yuan in Singapore in February, following an agreement under which Singapore agreed to grant full banking privileges to the Singapore branches of ICBC and Bank of China.

Lender to buy 20% stake in Taiwan's Bank SinoPac

The Industrial and Commercial Bank of China, the world's largest lender by market value, said yesterday it plans to buy 20 percent of Bank SinoPac in the first mainland investment in Taiwan's banking sector.

In a statement on its website, ICBC said it has a deal with SinoPac Holdings for its banking unit. The deal is still subject to regulatory approval in the mainland and Taiwan.

The stake acquisition will be worth NT$18.7 billion (US$625 million) based on the calculation of the net asset value at the end of June last year, ICBC said.

After winning regulatory approval, the price of the deal will be adjusted to reflect the actual condition of the targeted assets, ICBC said.

The news came a day after Taiwan's financial regulator said it will ease rules to allow banks from the mainland to buy a maximum 20 percent stake in Taiwan banks.