The Bank of China and its rivals are vying to be the first to open a branch in Taiwan after a long-awaited memorandum of understanding between the Chinese mainland and the island was signed.

Li Lihui, president of the Bank of China, said he would immediately apply to open a branch in Taiwan.

The memorandum signed on Monday allows banks, brokers and insurers to conduct business in each other's market for the first time.

It will take effect in two months.

The bank has already considered the president of the coming branch, which will have more than 20 staff members. The bank plans to hire Taiwan locals, according to Li.

He visited several possible sites when he was in Taiwan in September. Li said he expected a Taiwan branch to break even within two to three years.

The Industrial and Commercial Bank of China, the Bank of Communications and China Construction Bank all said earlier that they were planning to set up a Taiwan business once the memorandum was signed.