Ping An Insurance, the mainland's second-biggest insurer, has no plans to raise more funds in the next two to three years because a pending convertible bond issue is expected to boost its working capital sufficiently. Alex Ren Huichuan, its president, said Ping An was still awaiting regulatory approval to sell 26 billion yuan (HK$32 billion) of convertible bonds. The process normally takes six to nine months.
Ping An unveiled the bond sale plan in December, just nine months after raising HK$19.5 billion through a share placement in Hong Kong.
'Our businesses will be well-supported following the bond issuance,' Ren said yesterday.
'It will also be sufficient to boost our solvency margin ratio.'
Ping An's solvency margin ratio - a measure of an insurer's ability to settle claims - stood at 166.7 per cent at the end of last year, 31.2 percentage points lower than the previous year. But it was still well above the 150 per cent mark, a level seen as healthy and stipulated by the China Insurance Regulatory Commission.
The ratio could jump to 190 per cent if the bonds were converted to stock.
Ping An, 16 per cent owned by HSBC, reported a net profit of 19.48 billion yuan in 2011, up 12.5 per cent from a year earlier, driven by fast-growing banking operations and higher premium income.