Taiwan's financial regulator should relax the 5 per cent limit on mainland bank shareholdings in financial institutions on the island, China Construction Bank president Zhang Jianguo said yesterday. "A 5 per cent stake in a Taiwanese bank is not a 'meaningful' financial investment for us," Zhang said on the sidelines of a meeting of the Chinese People's Political Consultative Conference. He said the cap should be raised to 20 per cent, putting it on par with the limit on foreign shareholding in mainland banks. The Taiwanese banking market was stable but interest margins and returns were comparatively low, he added. The mainland's second-biggest bank by assets hopes to take a controlling stake in a small Taiwanese lender and boost co-operation with large banks. It has a representative office in Taiwan, and Zhang said he hoped it would soon win approval to be upgraded into a branch. Taiwan's financial regulator said in January it was considering expanding the island's qualified domestic institutional investor programme to open Taiwan's stock and bond markets to mainland funds. Zhang said expanding the programme was likely to benefit the asset management and trust units of mainland banks. CCB is also actively seeking acquisition opportunities elsewhere offshore. "Southeast Asia is a good target. And we have a group looking at new opportunities in the market," Zhang said. The bank's priority was to have a commercial banking business that could provide synergies with its existing business. "We are seeking some targets that have sound operations and good networks in their own markets," he said. The bank's mortgage loan quality remained good despite the State Council's latest measures to curb the property market, and the property tightening measures were unlikely to raise the default risk of mortgage loans, he said. Zhang said the government's M2 money supply growth target of 13 per cent this year would help sustain stable economic growth on the mainland. CCB was facing no deposit pressure and total deposits had changed little so far this year.