Ping An to increase Shenzhen Development Bank stake

12:59, September 02, 2010      

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Ping An Insurance (Group) Co. of China plans to acquire an additional 32 percent stake in Shenzhen Development Bank for 4.3 billion U.S. in a private placement to control the national lender.

Ping An, China's second-largest life insurer by premiums, said in a statement Wednesday that it will buy 1.6 billion new Shenzhen Development Bank shares or 32 percent of the bank's enlarged capital。

Ping An will fund the deal using cash and by selling its entire 91 percent stake in Ping An Bank Co, Ltd. The deal will also lead to the merger of Ping An's banking unit with Shenzhen Development Bank, giving Ping An Insurance control of a lender with a total net asset value of 45.7 billion yuan.

Combining Ping An Bank and Shenzhen Development Bank will give Ping An Insurance control of a lender with 855 billion yuan of total assets and help it avoid falling foul of regulations barring insurers from exerting power over two banks. Shenzhen Development Bank, China's first foreign-controlled lender, contributed 204 million yuan to Ping An's 29 percent profit gain in the first half, when the stake rose to 30 percent percent.

The deal will help Ping An to operate under new Chinese insurance rules, which prevent an insurer from controlling more than one financial company that operates the same type of core business.

By People's Daily Online


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