China Life Insurance

China Life mulling stakes in two banks

PUBLISHED : Thursday, 07 September, 2006, 12:00am
UPDATED : Thursday, 07 September, 2006, 12:00am

China Life Insurance, the mainland's largest life insurer, said it was interested in acquiring stakes in state-owned lenders Industrial and Commercial Bank of China and Agricultural Bank of China.

'Our next step is to expand our bank shareholdings which could help the development of our core life insurance business,' a mainland newspaper quoted China Life's chairman Yang Chao as saying yesterday. 'Our targets include ICBC and Agricultural Bank.'

Referring to speculation that China Life wants to be a strategic investor in Agricultural Bank, Mr Yang said details had not been worked out and would be subject to central government approval.

'We are interested in investing in ICBC's initial public offering if we find the investment return is good just as in the case of other state-owned banks' IPOs,' said Cao Qingyang, general manager of the firm's investor relations department.

Hong Kong-listed China Life bought shares of China Construction Bank Corp and Bank of China when they sold shares on the Hong Kong stock market. ICBC aims to raise as much as US$21 billion in a dual Hong Kong and Shanghai share sale later this year.

Mr Cao said that since Agricultural Bank's restructuring and state-funded recapitalisation plan was still awaiting central government approval, it was difficult to say whether China Life would come in as a strategic investor or simply buy shares independently.

He stressed, however, that the two companies had a very good business relationship and would pursue further co-operation.

China Life last week said it planned to sell up to 1.5 billion A shares, 5.3 per cent of its enlarged share capital, on the Shanghai stock exchange. It has picked Citic Securities, China International Capital Corp and Galaxy Securities to handle the deal. The offering could raise HK$2.1 billion.