China’s Ping An Insurance overtakes BlackRock to become HSBC’s biggest shareholder

China’s Ping An Insurance has overtaken BlackRock to become the largest shareholder of HSBC Holdings, as demand for offshore equity investments among Chinese companies grows.

The Chinese insurer’s stake in the bank has grown to just over 7 per cent, according to a filing to the Hong Kong stock exchange on Tuesday. Ping An Insurance held just over 5 per cent in HSBC in December last year.

Ping An’s 7 per cent stake, worth HK$93.72 billion (US$11.97 billion) based on HSBC’s closing stock price on Tuesday, overtakes BlackRock’s 6.6 per cent stake based on a filing last month.

New York-based BlackRock is the world’s largest asset manager with US$6.29 trillion in assets under management as of December 2017.

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“This type of investment is purely a financial investment of insurance funds. Ping An sees good prospects in HSBC’s development and HSBC has a relatively high dividend payout ratio, which [are] in line with the risk preference and return objective of insurance,” a Ping An spokesperson said.

HSBC pays an annual dividend of about 6 per cent of its share price, making its stock an attractive option for investors amid the uncertainty caused by the current trade tensions between the US and China.

The bank, which reported third-quarter results last week, saw earnings rise 32 per cent to US$3.9 billion.

HSBC once owned a 15.6 per cent stake in Ping An but sold it for US$9.39 billion in 2012 to Thailand’s Charoen Pokphand Group.

HSBC’s stock price closed up 0.84 per cent on Tuesday at HK$66.05.