Ping An Expected to Unveil a Fund Firm Soon

Ping An Insurance (Group) Company of China Limited (Ping An, 601318.SH, 2318.HK) is to unveil a fund firm as soon as possible.

Once set up, the newborn firm will be the first insurer-sponsored fund company of China's Mainland. In this way, Ping An becomes a financial holding group that has the insurance, banking, trust, securities, assets management and fund licenses.

As early as 2008, actually, the southern boomtown Shenzhen-based Ping An had begun preparing for the fund joint venture in partnership with United Overseas Bank. The Chinese side reportedly would takes 75% stake in the upcoming venture and the foreign side would hold the remaining 25% stake.

In the near term, the fund company is to launch new products, insiders disclosed. In the future, the new fund company is to be engaged in the cross sales jointly with the banking, securities and insurance units of the parent company.

Shenzhen Development Bank (SDB, 000001.SZ) and Ping An have passed the integration plan for Ping An Bank and SDB. The parent company intends to subscribe for a total of 1.639 billion shares of SDB at a cost of CNY 29.1 billion. The parent group will subscribe for these shares with a 90.75% stake in Ping An Bank and CNY 2.692 billion worth of cash. After the move, Ping An is to take a 52.38% stake in SDB and Ping An Bank will then become the subsidiary of SDB.

By June 30, 2010, SDB had 20 branches and 303 outlets across the nation. After the integration, the lender is expected to have five more branches and 70 more outlets. In the future, the retail banking and the service for small and medium enterprises customers will be the core businesses of the banking unit of Ping An. Ping An and its banking subsidiary vow to further boost the wealth management business as much as they can.

During the first half year, SDB achieved the net commission incomes of CNY 750 million from the intermediary business, accounting for 8.8% of its operating turnover in the period. Noticeably, the sales of the wealth management products increased by 427% year on year to CNY 33.7 billion from this January to June. At the same time, SDB saw its retail deposits outstanding stand at CNY 79.9 billion by the end of this June and the individual loan outstanding of CNY 102.3 billion. During the first six months of the year, the lenders accumulatively offered personal loans of CNY 27 billion, including CNY 3.7 billion worth of the personal auto loans.