Bank of East Asia is finalising plans to buy up to a 25 per cent stake in Malaysian financial services provider Affin Holdings, a deal that will give it access to the Islamic banking market, chairman David Li Kwok-po said yesterday. 'We have had negotiations with a Malaysian bank for over a year. We are close to finalising our arrangement with them,' Mr Li told reporters in Shanghai. 'We would like to have between 20 and 25 per cent.' Mr Li did not identify the Malaysian bank, but Affin officials confirmed the talks yesterday. Hong Kong-listed Bank of East Asia already owns about 4 per cent of Affin. Mr Li said the deal, which is subject to regulatory approvals in Hong Kong and Malaysia, would allow Bank of East Asia to gain greater access to the tightly controlled Malaysian market and acquire knowledge to launch Islamic banking services. 'We may be able to introduce Islamic banking to the biggest Islamic country in the world in terms of population - Indonesia,' he said. Mr Li was in Shanghai for the opening of Bank of East Asia (China), a locally incorporated entity that will allow the bank to offer yuan products and services to mainland residents. It is one of four overseas banks - including Citibank, HSBC and Standard Chartered Bank - which were granted approval to incorporate locally. The foreign banks are still awaiting regulatory approval to offer an expanded range of retail services. 'There will be a certain process. It ought to be fast,' said Raymond Yu Hok-keung, an executive director and chief executive of BEA (China). BEA (China) yesterday also signed agreements with three strategic partners - American International Assurance, American Insurance Underwriters and SIIC Shanghai (Holdings) - to set up a financial company under the Shanghai government. Mr Li said Bank of East Asia had entered into a 'dialogue' with more than 30 mainland city-level commercial banks about the possibility of taking stakes.