The FINANCIAL — HSBC has entered into an agreement to acquire a 10 per cent stake in Vietnam's leading insurance and financial services group, Vietnam Insurance Corporation (Bao Viet), for VND4,121 billion (approximately US$255 million) as a result of which HSBC becomes the company's sole foreign strategic partner.
According to HSBC under its strategic partnership with Bao Viet, HSBC will offer the Vietnamese company technical assistance across all its businesses, with a focus on further enhancing its insurance capabilities. This will include the secondment of specialist employees and the provision of training to Bao Viet.
Headquartered in Hanoi, Bao Viet provides a diverse range of financial products and services to the rapidly growing domestic market. Through its 126 branches and 400 sub-branches, 5,000 employees and 40,000 agents, the company is market leader in both life and general insurance measured by premium income.
BaoViet Insurance is Vietnam's largest general insurer with a market share of 35.2 per cent and 20.2 million policyholders in 2006, while BaoViet Life has consistently been one of the top life insurers in Vietnam with 1.6 million life policies in force. The Bao Viet group had total assets of US$1,039 million¹ at 31 December 2006.
"This investment and strategic partnership with Bao Viet reflects a growing commitment to Vietnam, and is in line with HSBC's stated strategy of targeting investment at high growth markets with international connections. Vietnam is one of the fastest growing economies in Asia, with average GDP growth of more than 7 per cent in the past 10 years”, Stephen Green, Group Chairman of HSBC Holdings plc said.
"We are honoured to be able to play a leading role through this landmark transaction in the first equitisation of a major state-owned enterprise in Vietnam. The deal also complements HSBC's growing presence in the country's banking sector – where we were the first foreign bank to receive approval for a 15 per cent strategic investment in a domestic Vietnamese bank, Techcombank – and reinforces our commitment to build presence in emerging markets."
"Bao Viet, with its nationwide distribution network, its well-known brand name and through its strategic partnership with HSBC Insurance, is ideally positioned to tap into the significant market potential present in Vietnam's fast expanding insurance industry. I believe our partnership, through bringing together the best of our people and resources, will assist Bao Viet in becoming a world class business to the benefit of its customers, employees and public shareholders," Clive Bannister, Group Managing Director, Insurance, HSBC Holdings plc, said.