Industrial and Commercial Bank of China (Asia) (ICBC) has stepped into the local life insurance market by teaming up with the United States' largest life insurance company's local arm.
The bank yesterday signed an agreement with Metropolitan Life Insurance (MetLife) of Hong Kong - the local subsidiary of US-based Metropolitan Life Insurance.
Under the agreement, ICBC (Asia) - a local bank majority-owned by China's largest commercial bank, Industrial and Commercial Bank of China - will use its local branch network to sell MetLife's products, increasing Metlife's exposure in Hong Kong. The local office, set up in 1995, sells its products through brokers and agents.
This will be ICBC's debut into insurance-product sales to customers, part of the bank's plan to increase its fee income.
Chris Chan, managing director and chief executive of ICBC (Asia), said 16 per cent of the bank's business was from fee-based business while it hoped this would increase to 25 per cent in two years.
'With the interest-rate deregulation in July, local banks would no longer rely only on the interest income but they would need to increase exposure in the fee income business,' he said, adding that staff at 70 per cent of its branches had qualified as life insurance agents.