Life of Guangzhou - HSBC Signs Agreement to Sell Its Stake in Ping An Bank

HSBC, which owns 19.9 per cent of Ping An Insurance (Group) Company of China Limited (Ping An Group), has entered into an agreement to sell its 27 per cent stake in Ping An Bank Limited to Shenzhen Commercial Bank Company Limited (SZCB), which is an 89.36 per cent owned subsidiary of Ping An Group.

The transaction is part of Ping An Group's consolidation of its banking businesses within SZCB. HSBC is supporting its Chinese partner in this endeavour. The consideration is expected to be US.4 million (approximately RMB228.7 million), subject to a review of Ping An Bank’s audited net asset value as at 31 December 2006.

Vincent Cheng, Chairman of The Hongkong and Shanghai Banking Corporation Limited, said: “We will continue to invest in and expand our operations in China as well as strengthening our relations with our strategic partners comprising Ping An Group, Bank of Communications and Bank of Shanghai. These strategic investments are a core component of our growth strategy in China. Additionally, we are in the process of locally incorporating our China business to allow us to further expand our network and range of services.”

Ping An Bank, previously named Fujian Asia Bank, was established in mainland China in 1993 as a Sino-foreign equity joint venture bank. It had assets of RMB1.1 billion (approximately US3.7 million) at the end of December 2005. In 2003, Fujian Asia Bank was acquired by HSBC and China Ping An Trust & Investment, a subsidiary of Ping An Group.

Ping An Bank is currently headquartered in Shanghai and has one branch in Fujian. The bank offers a range of foreign currency services to local and foreign customers, as well as renminbi-denominated services to corporate customers and foreign individuals. Completion of the transaction is subject to agreeing final terms and to obtaining the necessary approvals.