(Yicai Global) Jan. 7 -- China's state-owned Xuzhou Construction Machinery Group will become China's first manufacturing firm to set up a bank overseas to support Chinese infrastructure investment in Brazil.

XCMG, which has Brazil's largest heavy machinery manufacturing plant built by a Chinese firm, will allocate BRL60 million (USD15 million) in capital for its Banco XCMG in southeastern Minas Gerais state, Xinhua News Agency reported. This will also become Brazil's first fully Chinese-owned financial institution.

Last October, Banco Central do Brasil gave the green light to the project while requiring the Jiangsu province-based firm to complete preparations in six months.

Banco XCMG will engage in financial leasing, consumer credit, and investment banking business, said the lender's President Gu Shiying. It will support XCMG's local industrial park and boost its business in South America, Gu added.

After the initial investment to secure a sufficient capital adequacy ratio, XCMG will inject more capital into the bank while serving the local economy, said Chairman Wang Min.

Founded in 1989, XCMG has more than 30 subsidiaries and 15 overseas factories. XCMG's shares [SHE: 000425] rose 1.08 percent to CNY5.63 (US 81 cents) today.

Editor: Emmi Laine