UPDATE: China: Four Banks Apply To Take Stakes In Insurers
By Daniel at 29 July, 2008, 9:21 am
UPDATE: China: Four Banks Apply To Take Stakes In Insurers
Last Update: 7/29/2008 3:02:51 AM
(Adds quotes from regulator, first-half data on insurance companies’
investments.)
BEIJING (Dow Jones)–China’s insurance regulator has received applications from
four banks to take stakes in insurance companies, an official at the regulator
said Tuesday.
Industrial & Commercial Bank of China Ltd. (1398.HK), China Construction Bank
Corp. (0939.HK), Bank of Communications Co. (3328.HK) and Bank of Beijing Co.
(601169.SH) have submitted applications, China Insurance Regulatory Commission
Assistant Chairman Yuan Li said during a press briefing.
The CIRC is considering the banks’ applications and will pass them on to the
State Council, or Cabinet, for final approval, Yuan said.
He didn’t give details on the banks’ applications.
Officials for ICBC and China Construction Bank declined to comment. Officials for
Bank of Communications and Bank of Beijing weren’t immediately available for
comment.
The 21st Century Business Herald reported in June that ICBC is likely to take a
43.5% stake in a joint venture restructured from an existing venture between
China Insurance International Holdings Co. (0966.HK) and Fortis NV (FORSY)After
the restructuring, China Insurance International will hold a 43.5% stake in the
venture, while Fortis will hold 13%, the paper said.
State media reported in January that Bank of Communications was planning to buy a
stake in Shanghai-based China Life-CMG Insurance Co., a 50-50 joint venture
between China Life Insurance Co. (LFC) and Commonwealth Bank of Australia.
(CBA.AU)
China Construction Bank Chairman Guo Shuqing said in March that his bank was
likely to buy a stake in Beijing-based Happy Life Insurance Co.
Bank of Beijing Chairman Yan Bingzhu said earlier this year the bank was planning
to buy a stake in Pacific-Antai Life Insurance Co., a joint venture between China
Pacific Insurance (Group) Co. (601601.SH) and ING Groep NV (ING).
The applications come after the CIRC and the China Banking Regulatory Commission
signed a memorandum of understanding in January on strengthening cross-sector
supervision and cooperation, covering areas such as banks and insurers taking
stakes in each other.
The two regulators have jointly drafted a regulation covering commercial banks’
investments in insurance companies and are still discussing the details, Yuan
said, without giving a timetable for the issuance of the regulation.
The CIRC has allowed insurance companies to take stakes in domestic nonlisted
commercial banks since 2006.
Yuan also said the CIRC will allow insurance companies to invest overseas and
invest more on infrastructure in future. He didn’t give details.
At the end of June, 53.6% of the CNY2.7 trillion of insurance funds was invested
in bonds, 10.7% in stocks, 6.9% in equity funds, and 25.8% in bank deposits, he
said.
Insurance companies’ profit from investments and bank deposits in the first half
totaled CNY64.9 billion, Yuan said.
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