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August 27, 2009

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China Life may invest in bank and US insurer

CHINA Life Insurance Co may invest in the Agricultural Bank of China and American International Assurance, Chairman Yang Chao said yesterday.

The world's biggest insurer by market value has renewed a strategic partnership with ABC, including a possible equity swap or equity investment, said Yang, who was in Hong Kong to attend the insurer's interim report briefing.

"Agricultural Bank is a good partner with us. It has been a longtime big contributor to our bancassurance business," Yang said. "Equity cooperation, if possible, is part of a trend for our win-win strategy."

Beijing-based ABC is the last top four state-owned bank that is slated to go public.

The bank, with a huge network of 24,400 outlets, half of which are located in rural areas, got a US$19 billion government cash injection in November 2008 and restructured into a shareholding company in January this year, paving the way for its listing.

Xiang Junbo, chairman of the bank, said earlier in Shanghai that it is in talks with several parties as potential strategic investors. But he declined to elaborate.

Yang also said yesterday that the insurer has met with underwriters of AIA, which is seeking an initial public offering in Hong Kong.

"We are of course interested in any influential, branded financial institutions with sound results," he said.

Deutsche Bank and Morgan Stanley are the global coordinators for AIA's IPO of more than US$4 billion.

Yang also said China Life has no plan to sell shares of China Minsheng Banking Corp. The insurer owns about 960 million Minsheng shares, and it can sell 97 percent of the stake from August 23, said Minsheng's first-half report.

Also at a simultaneous briefing in Beijing yesterday, China Life President Wan Feng said the insurer's full-year premiums are expected to increase.


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