Cathay Financial Holding Co. Ltd. and Bank of Nova Scotia have entered into an agreement for the Taiwanese company's acquisition of Bank of Nova Scotia's Malaysian banking subsidiary for about US$255 million.

Cathay United Bank Co. Ltd. and Cathay Life Insurance Co. Ltd., both subsidiaries of Cathay Financial, will acquire a 51% and 49% stake, respectively, in Bank of Nova Scotia Bhd.

The transaction will make Cathay Financial the first Taiwanese bank to provide banking services in Malaysia and expand the company's presence in the ASEAN region.

The deal is subject to approvals from Taiwanese and Malaysian regulators and is expected to close in the second half.