Chinese construction machinery maker Xuzhou Construction Machinery Group (XCMG) has got the necessary approvals to set up a fully-owned overseas bank in Brazil during the first quarter of this year, according to a top company official.

The move is part of XCMG's efforts to meet the diversified local demands and promote the development of network distribution in finance products and services, said XCMG Chairman Wang Min.

XCMG has become the first beneficiary of a new policy issued by the Brazilian government that allows foreign investment in the country's financial institutions.

According to the report by Xinhua News Agency on Tuesday, a branch or a representative office of Banco XCMG will be established in Brazil's biggest city Sao Paulo during the first quarter of this year.

"We believe that Banco XCMG, with the support of China and Brazil, will become a professional, highly efficient and pragmatic corporate bank, be a new financial platform serving Chinese and Brazilian enterprises, and a new contributor to the economic development and employment in Brazil," said Wang.

"The integration between manufacturing industry and finance will set a new model of overseas development (for Chinese companies)," said Yin Jingbo, an associate professor with Shanghai Jiao Tong University.

The development of manufacturing requires consistent capital, while the integration of industry and finance could create more value in supporting the industry, said Yin.

XCMG has already been present in Brazil for over eight years. The company has now realized the necessity of integrating industry with finance, and the bank is a breakthrough of Chinese assets in the South American financial services sector.

Nearly 95 percent of Brazilian's annual engineering machinery sales is materialized through bank loans, and a few of XCMG's competitors have their own banks for providing financing solutions to their clients, said XCMG's Wang.

Last October, the Central Bank of Brazil (Banco Central do Brasil) approved Banco XCMG to open in six months. It is not only the first overseas bank of the Chinese manufacturing industry, but also the first foreign participant bank to receive direct approval from the Central Bank of Brazil.

Banco XCMG will be able to operate in businesses like financing and leasing, capital loans, consumer credit, lending, as well investment, said Gu Shiying, head of Banco XCMG.

It will support XCMG's sales in the Brazilian market and offer financial products and services while supporting the development of XCMG's distribution network, Gu said.

"The bank will be able to further enhance XCMG's core competitiveness through product innovation, lower financial transaction costs and improve risk management. Being an industrial player, XCMG's thorough understanding of the industry will enable it to provide more tailor-made financial products and services," said Yin.

The approval of Banco XCMG by BCB will allow XCMG to explore a new, customer-centric sales model to further market expansion.

"Compared to conventional commercial banks, Banco XCMG is capable of providing suitable financial products for its end users and distributors with high service efficiency and low financing costs," said Wang Min.

XCMG has set the goal of becoming one of the top three companies in the industry by 2025. It has identified overseas markets and highend development as key to its future. In the past three decades, XCMG's overseas revenue has risen from less than $10 million a year to more than $2.3 billion.