PING AN TO TAKE FULL CONTROL OF PING AN BANK

Chinese insurer Ping An is to buy the part of Ping An Bank that it does not already own from global bank HSBC. Ping An will buy HSBC’s 27% stake in Shanghai-based Ping An Bank for $29.4m  and will transfer this holding, plus its own 73% stake, to its Shenzhen Commercial Bank subsidiary. HSBC is currently a 19.9% stakeholder in Ping An, although this will be reduced to just over 16% after Ping An’s forthcoming IPO on the Shanghai exchange. HSBC said that it backed Ping An’s plans to consolidate its banking operations within Shenzhen Commercial, in which Ping An owns an 89% stake. The move would permit Ping An Bank, currently classed as a joint venture with a foreign player, to reclassify itself as a domestic bank. This would allow it to offer yuan-based services to China’s 1.3bn retail sector. Joint venture banks are limited to foreign-currency deals and yuan-based business with corporates and foreign individuals. HSBC said that the final price for the transaction, which is subject to regulatory approval, could change, subject to a review of Ping An Bank’s net asset value at the end of last year. Ping An Bank was originally established as Fujian Asia Bank in 1993. It was acquired jointly by Ping An Group, through Ping An Trust and Investment Company, and HSBC for less than $20m in 2003. In 2005 it relocated its headquarters from Fuzhou to Shanghai. Meanwhile, Ping An insurance said that premium income was up 24% in January year-on-year, with premiums rising to 9.72bn yuan from 7.84bn yuan the year before.