Anbang put off by price for Wing Hang

Anbang Insurance, the mainland insurer considering a bid for Wing Hang Bank, is baulking at the asking price for the family-run Hong Kong lender, two sources said.

Beijing-based Anbang had indicated it was willing to pay no more than 1.7 times the lender's book value this year, one source said. That compared with an asking price of about two times, the sources said. Wing Hang has a market value of about US$4.7 billion, which is 1.7 times its estimated book value this year.

Wing Hang had also drawn interest from Singapore's Oversea-Chinese Banking Corp and Canada's Bank of Nova Scotia, sources said earlier. Hong Kong's family-run banks, pressured by larger competitors like HSBC and Bank of China, are attracting interest as the city's role in cross-border financing expands.

Binding bids for Wing Hang were expected during the middle of this month, although there was no definitive deadline, the two sources said.

Anbang, which offers insurance and asset management, was working with Deutsche Bank for the Wing Hang negotiations, they said. The insurer, whose shareholders include state-owned Shanghai Automotive Industry Corp and China Petrochemical (Sinopec), has 510 billion yuan (HK$649 billion) of assets, according to its website.

Any purchase by Anbang would require regulatory approval from the China Insurance Regulatory Commission, which added to the risks of completing a deal and might deter Wing Hang from selecting Anbang as a preferred buyer even if it could meet the asking price, one source said.