Lufax to acquire Hong Kong virtual lender Ping An OneConnect Bank for US$119.5 million
- An overlap in services and target customers will help virtual bank ‘synchronise well’ with its existing operations, Lufax says
- The proposed deal comes as Ping An reshuffles its investment portfolio while cutting its exposure to China’s heavily indebted property sector
PAOB is indirectly owned by Ping An, China’s largest insurer, through OneConnect, which the insurer controls. While Lufax lends to small businesses on the Chinese mainland, PAOB offers virtual banking services primarily to small and medium-sized enterprises (SMEs) in Hong Kong.
An overlap in services and target customers will help PAOB “synchronise well” with Lufax’s existing operations, it said in a filing to the Hong Kong stock exchange on Tuesday. “Both [Lufax] and PAOB share the same vision of using technology to empower financial services and improve customer experience,” Lufax added.
As of June 30 this year, PAOB had a loan balance of HK$1.8 billion and a capital adequacy ratio of 100 per cent, “which was substantially higher than the relevant regulatory requirement”, Lufax said. The ratio measures the amount of capital a bank retains relative to its risk and is an indicator of how well a bank can meet its obligations.
The proposed acquisition comes as Ping An reshuffles its investment portfolio and enhance its revenue-generating capacity, while cutting its exposure to China’s heavily indebted property sector.