State-controlled Bank of China (Hong Kong: 3988) opened its first branch in Taipei on Wednesday -- the first arrival of a mainland bank in Taiwan -- and plans to increase lending to local businesses, China Daily reported.

The bank currently offers corporate finance services and plans to work with 29 Taiwanese banks, said Li Lihui,  president of Bank of China, at the branch's opening ceremony. Bank of China has offered Taiwan-funded companies over 160 billion yuan ($25 billion) in the past three years and plans another 200 billion yuan in credit over the next three years, he said.

The Taipei branch opening marks a major step in Bank of China's development as well as a milestone in deepening economic and financial cooperation between the mainland and Taiwan, said Li.

Bank of China also plans to create yuan settlement services, which would allow Taiwanese companies to save on foreign-exchange costs on exports, Taipei Times reported. Companies can use designated banking units to currently exchange yuan, but they cannot take deposits or provide loans.