Ping An Insurance, China's second-largest life insurer, has entered into exclusive talks to buy more than 60 per cent of Shenzhen Commercial Bank from the government, sources say.
Shenzhen-based Ping An, chosen as the preferred buyer of the stake after the first round of bidding last month, has been in exclusive talks to buy the stake for the past few weeks. It is expected to be named as the buyer soon, according to people briefed on the situation.
Ping An is anxious to expand its small banking platform and jump-start a credit card business as part of a strategy to develop a diversified financial holding company. It had previously lost in the auction for an 85 per cent stake in the mainland's 11th largest national bank, Guangdong Development Bank (GDB).
Unlike the open auction for the GDB stake, for which Ping An submitted the third-highest bid after those of consortiums led by Citigroup and Societe Generale, the offers for Shenzhen Commercial were not disclosed.
Officially, the Shenzhen government asked the bidders to pay at least US$500 million, sources said. It was not clear if Ping An would later agree to pay a higher price.
Shenzhen Commercial also attracted bids from as many as six other domestic and foreign lenders including Bank of East Asia, Bank of Communications and Bank of Nova Scotia, a source said.