NEW CHINESE REGULATIONS ON BANK INVESTMENT NOW READY

New Chinese regulations on insurers’ investments in banks are fundamentally completed and will be released in the near future, reports China Daily , citing an official from the China Insurance Regulatory Commission. The new measures come as Shenzhen-based insurer Ping An completed its purchase of Shenzhen City Commercial Bank and was reported to be in the running to spend significantly more on a stake in Guangdong Development Bank — a move that would transform Ping An into a financial services holding company rather than just an insurer. Cao Deyun, an official in CIRC’s capital management division, told China Daily that “the focus of the detailed regulation will be the purpose and means of investment, requirements for the investment target and risk management”. It is thought that the regulations will forbid an investment in an unlisted bank if it does not have a capital adequacy ratio of more than 8%, total assets of more than 50bn yuan and a non-performing loan ratio of less than 5%. The CIRC has backed the investment by insurers into banks, although the China Banking Regulatory Commission has been less effusive on the matter.