Lock Pacific Aetna 50% shares Beijing Bank intends to invest in insurance company

After the State Council approved in principle the bank's shares in the insurance company, according to people familiar with the situation, N Beijing (601169.SH) has formally submitted an application for investment in the insurance company, its first choice is the Shanghai joint Venture life insurance company--n Pacific Aetna Life Insurance Company (hereinafter "Pacific Aetna"). The Bank of Beijing's board of Directors confirmed the submission of the application documents, the Secretary of the board said that the current locking of the existing shareholders of the insurance companies, the key to the progress is the availability of regulatory authorities, especially the CIRC's approval. Earlier in October 2007, Yan Bamboo, chairman of the Bank of Beijing, revealed in a three quarterly statement that it was negotiating a takeover of the Chinese stake in two joint venture life companies in the Netherlands international Group to expand its revenue streams. ING currently holds a 16.07% per cent stake in the bank of Beijing and is also a strategic investor in Beijing. Although the matter has not yet been put to a close, people familiar with the situation said the Beijing bank plans to stake in the insurance company will be Pacific Aetna. 50% cap policy hurdles ing Group is the only foreign company in mainland China with two life insurance licences, which was established in 1998 and 2002 by the Pacific Life Group and the Beijing Capital Venture Group (hereinafter "first") to establish the Pacific Palic and pioneer Palic, Two company headquarters are located in Shanghai and Dalian, the formation of a south-north "divided River and governance" situation. People familiar with the situation said, "from the current performance and development of the two joint venture companies, Beijing Bank acquisition of Pacific Aetna stake is cheaper and more feasible." "One of the signs is that the pioneer group has not yet indicated its intention to sell the first Aetna stake." The first Aetna performance growth also seems to be difficult to let people off. ING Group China's president Wu Zhixheng revealed that 2007 Aetna to achieve a premium income of 1.2 billion yuan, and 2006 this data is only 410 million yuan. "The board has just passed a resolution on the creation of an Aetna capital increase, which will be completed by 2008." "The Pacific Insurance (group) company (n Kingpin, 601601.SH) is a clear indication that the stakes will be transferred. "The company's board of directors and shareholders ' meetings have decided to sell the 50% per cent stake in the Pacific Ocean, but have not signed any agreement with any third party," the Tai Bao said in its prospectus in December 2007. "The prospectus shows that at present, Pacific Aetna registered capital of 700 million yuan, as at June 30, 2007, the total assets of 2.534 billion yuan, net assets of 345 million yuan, 2007 1-June to achieve a net profit of 26 million yuan." But there are still obvious policy hurdles to getting regulatory approval. The regulations for the administration of foreign insurance companies stipulate that foreign insurance companies and Chinese companies and enterprises jointly establish joint ventures in China to operate life insurance business, of which the proportion of foreign capital shall not exceed 50% of the total share capital of the company. The shares of a joint venture life company held directly or indirectly by a foreign insurer shall not exceed the proportion limit stipulated in the preceding paragraph. Because INg holds 16.07% per cent of the Bank of Beijing, so if the Beijing bank's stake in the Pacific Ocean is made, it will make ING direct and indirect shareholdings exceed the 50% ceiling. In this regard, a financial analyst believes that the best possibility is to be able to obtain regulatory concessions or exemptions, so that the proportion of ING in the Pacific Aetna, to ensure the direct and indirect holding of not more than 50%, such as the two life insurance companies for ING Investment merger. But merging two "Aetna" companies is not easy. In this respect, Wu Zhixheng said that ING will continue the previous two companies to attack the north-South market strategy, there is no plan to merge two companies, "We are the two companies are now operating conditions are recognized, the merger needs to be shareholder, regulatory approval, now is not the time." "At present, the initiative of Aetna branch of the main layout in Beijing, Liaoning, Shandong, Henan, while the Pacific Aetna in Shanghai, Guangdong, Jiangsu as the focus of business." According to people close to the situation, the State Council, while agreeing on the principle that banks take stakes in insurance companies, still needs a discussion, which is currently only allowed to be piloted in 3 to 4 banks, "the Bank of Beijing is vigorously trying to qualify for the pilot." "The Beijing bank's financial map has yet to be considered by the regulatory authorities, but even now the bank of Beijing faces other competitors in the Pacific's stake race," he said. The Great Wall Asset Management company, one of the four asset management companies ("Great Wall Asset"), has been in contact with Pacific Aetna for several months and has been recognised by regulators, people familiar with the matter said. Previously, asset management companies were not included in the business scope of the insurance company. However, with China Xinda Asset Management company wholly-owned letter Tatsu Investment Co., Ltd. invested 200 million yuan to become a major shareholder of happiness Life, and was approved to open the business, asset management company's investment in the insurance industry has been the acquiescence of the regulatory authorities. But the above people also confirmed that, as the Pacific Aetna foreign investors, "ing clearly to the bank of Beijing's access to strong support. In fact, although the Beijing bank's stake in the insurance company has not yet clear, but as the Beijing bank's strategic investors, ING behind the role of the pushing hand is obvious. The person familiar with the matter said that after ING had invested in the Bank of Beijing, it restructured Beijing's banking business at various levels. ING Group has posted a deputy governor and assistant to the Bank of Beijing for retail business and risk management, including Houdemin Bruno Houdmont, director and Vice president of Beijing Bank's Beijing bank, as former chief executive of ING Bank. In terms of insurance business, as early as May 16, 2005, the Bank of Beijing and ING Group's first Aetna Life Insurance Co., Ltd. signed a cooperation agreement. The two sides have conducted in-depth cooperation in the field of financial advisers, "one-stop" service and direct selling banking services, which has also made the Bank of Beijing's business more diversified. The development of the intermediary business of the Bank of Beijing also benefited a lot from the cooperation with ING. For the Beijing bank to apply for a stake in the insurance companyAppropriate, Ping An securities analysts believe that in the face of foreign investment in the competition and homogeneity of domestic competition in the adverse factors, banks to financial holding group of the direction of transition is a trend of development. "By investing in insurers, you can increase the performance of banks, but the main thing is to stabilise the banks ' performance." "In the past, banks and insurance companies are generally strategic alliances and cooperation, and now the Bank of Beijing in the promotion of ING to participate in the Pacific Aetna, from this point of view, through the equity approach to strengthen the cooperation and alliances between the two sides, this is more than the general sense of strategic alliance cooperation between the stability This has also greatly improved the bank's sales and financing business. The analyst said. Another analyst said that the current restrictions on the development of insurance companies are mainly reflected in capital constraints and expansion of the exhibition industry. "If the Pacific Aetna transfer to the capital of the powerful Beijing bank, its capital constraints can be expected to be resolved." ”