Insurer to boost bank's capital
Source: Bloomberg News |
August 19, 2011, Friday
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Print Edition
Print Edition
PING An Insurance (Group) Co, China's second-biggest insurer, said it will spend as much as 20 billion yuan (US$3.1 billion) to bolster capital at Shenzhen Development Bank Co after first-half profit rose.
Net income climbed 33 percent to 12.8 billion yuan, or 1.67 yuan a share, from 9.61 billion yuan, or 1.30 yuan, a year earlier, as premium income and inves tment returns expanded, the Shenzhen-based insurer said yesterday in a filing with the Shanghai Stock Exchange.
Ping An, led by Chairman Peter Ma, boosted net premiums by 39 percent as the insurer's focus on telemarketing and agents helped bolster revenue amid slower car sales and tighter regulation on selling policies at banks. The insurer will buy as many as 1.19 billion more shares in Shenzhen Development, adding to its 52 percent stake, to boost capital and ensure "balanced" growth at banking, insurance and asset-management operations, the firm said in an e-mailed statement.
"Profit was slightly better than expected; banking and non-life operations were fairly good," said Nan Sheng, a Shanghai-based analyst at UOB Kayhian Investment Co. "We can't exclude fundraising pressures at the group now because after the injection they won't have too much more money to recapitalize the insurance units" when needed to support growth.
Net investment income, mainly dividends and bond yields, rose 29 percent to 16.2 billion yuan, according to the statement. The insurer also posted 551 million yuan in realized and unrealized investment gains, reversing a 2.2 billion yuan loss a year earlier.
Ping An will continue to boost its bond holdings and deposits to tap the nation's rising interest rates, Chief Financial Officer Yao Bo told reporters in Hong Kong yesterday. Fixed-income investments rose 0.4 percentage point from end of 2010 to 78.2 percent of its portfolio as of June 30, while equities climbed to 11.5 percent.
Shenzhen Development, which posted a 56 percent surge in first-half profit, plans to sell the shares to Ping An in a private placement for 16.81 yuan apiece, the lender said in an e-mailed statement. The sale will boost the bank's capital adequacy ratio to more than 13 percent once completed. The sale will lift Ping An's stake to at least 59 percent and no more than 61 percent.
Net income climbed 33 percent to 12.8 billion yuan, or 1.67 yuan a share, from 9.61 billion yuan, or 1.30 yuan, a year earlier, as premium income and inves tment returns expanded, the Shenzhen-based insurer said yesterday in a filing with the Shanghai Stock Exchange.
Ping An, led by Chairman Peter Ma, boosted net premiums by 39 percent as the insurer's focus on telemarketing and agents helped bolster revenue amid slower car sales and tighter regulation on selling policies at banks. The insurer will buy as many as 1.19 billion more shares in Shenzhen Development, adding to its 52 percent stake, to boost capital and ensure "balanced" growth at banking, insurance and asset-management operations, the firm said in an e-mailed statement.
"Profit was slightly better than expected; banking and non-life operations were fairly good," said Nan Sheng, a Shanghai-based analyst at UOB Kayhian Investment Co. "We can't exclude fundraising pressures at the group now because after the injection they won't have too much more money to recapitalize the insurance units" when needed to support growth.
Net investment income, mainly dividends and bond yields, rose 29 percent to 16.2 billion yuan, according to the statement. The insurer also posted 551 million yuan in realized and unrealized investment gains, reversing a 2.2 billion yuan loss a year earlier.
Ping An will continue to boost its bond holdings and deposits to tap the nation's rising interest rates, Chief Financial Officer Yao Bo told reporters in Hong Kong yesterday. Fixed-income investments rose 0.4 percentage point from end of 2010 to 78.2 percent of its portfolio as of June 30, while equities climbed to 11.5 percent.
Shenzhen Development, which posted a 56 percent surge in first-half profit, plans to sell the shares to Ping An in a private placement for 16.81 yuan apiece, the lender said in an e-mailed statement. The sale will boost the bank's capital adequacy ratio to more than 13 percent once completed. The sale will lift Ping An's stake to at least 59 percent and no more than 61 percent.
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