The Bank of Communications has gained regulatory approval to step into the insurance market as the bank gears up to be an all-round financial company, the bank said yesterday.
The Shanghai-based bank, or BoCom, will buy a 51 percent stake in China Life-CMG Insurance Co, a venture previously between China Life Insurance Co and Commonwealth Bank of Australia, the bank said yesterday.
The bank will buy the stake from China Life, which is shedding its stake in the joint venture insurer to avoid internal competition. The bank declined to disclose how much it paid.
BoCom, the fifth-biggest bank of China, expects to start operation of its own insurance unit this year, Executive Vice President Dicky Yip said last month. The bank has already run bancassurance business in conjunction with more than 10 insurers in China.
The Bank of Beijing will buy a stake in ING Capital Life Insurance Co from Beijing Capital, a bank executive who declined to be named told Shanghai Daily.
Chinese banks are eager to get into non-banking financial sectors such as asset management and insurance to diversify income channels.
BoCom is building up its universal financial conglomerate along with the trend. It owns a leasing unit, a trust subsidiary and a fund management venture with Schroders and is also seeking a brokerage license.
Earlier this year, BoCom's partner, HSBC, set up its life insurance joint venture in Shanghai, riding on a growing need for financial protection.
(Shanghai Daily September 9, 2009)