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October 20, 2009

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Great Wall forms life insurance venture

China Great Wall Asset Management Corp has launched a life insurance joint venture with Nippon Life Insurance, Japan's biggest life insurer by assets, as part of efforts to transform itself into a financial institution to deal in commercial activities, a statement on its Website said over the weekend.
The two companies will equally own 50 percent of the 1.3 billion yuan (US$190 million) venture that will target the life insurance business in the Yangtze River Delta, said Great Wall, a state-run firm that was formed to clean up the bad debts of banks.
Great Wall bought its stake in the venture from Shanghai SVA Group in September. The venture was jointly set up by SVA and Nippon Life in 2003.
Great Wall and Nippon Life will each inject 500 million yuan into the joint venture to increase its registered capital to 1.3 billion yuan, the statement said.
China created four asset management companies in 1999 - Great Wall, Cinda, Huarong and China Orient - to clear up the balance sheets of the nation's four biggest banks.
The four AMCs cleared up billions of yuan worth of bad debts at the lenders in a government-directed exercise in 2007 and have since then focused on turning themselves into financial institutions to conduct commercial activities.
Great Wall has absorbed 600 billion yuan worth of bad assets from the Agricultural Bank of China, the Bank of China, the Industrial and Commercial Bank of China and China Everbright Bank over the past decade.


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