China Construction Bank Corp (中國建設銀行) tied up with local firm China Life Insurance Co (中國人壽) to invest in Pacific Antai Life Insurance Co (安泰人壽), the first insurance venture since China and Taiwan signed the Economic Cooperation Framework Agreement (ECFA) in June.
Construction Bank, China’s second-largest lender, said in a statement yesterday it bought 1 percent of Shanghai-based Pacific Antai (太平洋安泰人壽), boosting its stake to 51 percent. The Taiwanese insurer plans to pay 379 million yuan (US$57 million) for a 19.9 percent stake. Both companies bought the shares from China Pacific Insurance Co (中國太平洋保險), which held a 50 percent stake in Pacific Antai.
The investment is the first by a local financial company in China since the trade agreement on June 29, as both sides seek to forge closer ties. The purchase also made Construction Bank the biggest shareholder in the Chinese insurer.
PHOTO: WANG MIN-WEI, TAIPEI TIMES
China Life aims to use Construction Bank’s network and client base to develop the life insurance business as it enters China, the Taipei-based company said in a statement to the Taiwan Stock Exchange yesterday.
Construction Bank first bought 50 percent of Pacific Antai from ING Groep NV a year ago. The Beijing-based bank plans to rename Pacific Antai as Jian Xin Life Insurance Co (建信人壽).
China is letting banks expand into insurance, brokering and funds management, winding back former Chinese premier Zhu Rongji’s (朱鎔基)1993 restrictions, to help them diversify revenue and reduce reliance on loans. Lenders including Bank of Communications Ltd (交通銀行) and Industrial & Commercial Bank of China Ltd (中國工商銀行) have also invested in insurers.
Shares of China Life, one of the country’s five biggest life insurers, rose the most in 10 months to NT$26.95 in Taipei trading ahead of the announcement. The stock has gained 23 percent this year, compared with an 8.6 percent rise in the benchmark TAIEX.
China Jianyin Investment Securities Co will own 19.35 percent of Pacific Antai, while the remainder will be held by two investment firms, according to Construction Bank’s statement. The purchase is pending regulatory approval, it said.
Pacific Antai, formerly an insurance venture between ING and China Pacific Insurance, had more than 300,000 policy holders and 3.7 billion yuan of assets by the end of last year
Nomura International (Hong Kong) Ltd is the financial adviser for China Life.
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