The FINANCIAL — According to Dow Jones, China Merchants Bank Co. (3968.HK) said on May 5 it signed a deal to buy from a sister company a 50% stake in a Shenzhen-based insurance joint venture with Cigna Corp. (CI) for CNY141.9 million.
The agreement to buy the stake in Cigna & CMC Life Insurance Co. marks China Merchants' first foray into the insurance business.
The bank plans to seek shareholder approval to buy the stake, which has been held by Shenzhen Municipal Dingzun Investment Advisory Co., another unit of state-owned China Merchants Group.
China Merchants said the service fees and income from the insurance business will provide a steady stream of non-interest income for the company and boost its competitiveness.
The China Banking Regulatory Commission said in January it would allow banks to invest in insurance companies.
Cigna & CMC Life Insurance was set up in August 2003 and is owned equally by Cigna and Dingzun, according to an earlier Cigna press release.
Discussion about this post