China Life targets Agricultural Bank stake
China Life Insurance may take a stake in the Agricultural Bank of China to boost the return of its investment portfolio.
China Life is most likely to make the investment when the bank goes public, subjecting itself to a shorter lock-up period than the three years required of a founding corporate shareholder, a source said.
China Life's intention was initially revealed by its chairman, Yang Chao, and Agricultural Bank president Yang Mingsheng during a press event in Beijing on Thursday, the Guangzhou newspaper 21st Century Business Herald reported.
Such an investment could strengthen the their existing co-operation in cross-selling and asset management, Mr Yang of China Life was quoted as saying.
'We don't rule out a portfolio investment if ABC launches shareholding reform or a public offering,' a China Life spokesman in Beijing said yesterday.
Agricultural Bank's spokespeople did not comment.
Agricultural Bank is the last of the 'big four' state-owned commercial banks yet to undergo financial restructuring into joint-stock banks with clean balance sheets and corporate governance reforms.
Because of its poor asset quality, a restructuring plan involving state capital injection and an eventual public offering could still be two or three years away, officials and analysts have said.
But its massive branch network that reaches into rural areas that other mainland banks are shying away from appeals to China Life, the source said.
China Life failed to obtain government approval in time to become a founding shareholder in China Construction Bank and eventually bought US$250 million worth of its IPO shares.
It also subscribed to the recent public offerings of Bank of China and lately became the second-largest shareholder in Citic Securities.
Hong Kong-traded shares in China Life, also quoted in New York, rose 0.41 per cent yesterday.