Taikang Life, China Re Expecting A-share IPO

Taikang Life Insurance Co. and China Reinsurance (Group) Corporation (China Re) both have submitted the applications for getting listed in China's A-share market.

Insurers' products structure, investment management capability, solvency, risk control ability and employees' stocks will all be investigated by relevant regulatory departments before they are approved of the listing plans. As required by China Insurance Regulatory Commission, the regulator is to take supervisory measures to those insurance companies with the solvency adequacy ratio of less than 100%.

Currently, both Taikang Life and China Re have had a higher-than-200% solvency adequacy ratio. In addition, the employees' stock is another major aspect for the regulatory supervision. As early as 2008, actually, the insurance industry watchdog had regulated that any insurance company of the country should not establish any equity incentive plan or employee stock ownership plan (ESOP) before the promulgation of the national policy about the equity incentive and ESOP for domestic financial institutions.

However, many insurers have already released the ESOP or carried out that ESOP. Based in Beijing, Taikang Life is one of them. Therefore, it still takes time for the regulatory department to solve the ESOP issue of Taikang Life. As for China Re, the group is a lucky one without the involvement in such a problem.

In addition to insurance firms, some city banks of China are also eager to launch IPO sooner or later. Bank of Guangzhou is planning to bring in financial and strategic investors, to pave the way for getting listed in three years. According to the lender, it is to bring in qualified domestic or foreign institutions as the financial investors, no matter they are securities brokers, state-owned enterprises, trust and investment firms or insurance companies. Bank of Jinzhou, a city bank based in northeast China, prepares to apply to China Banking Regulatory Commission for going public. By the end of this June, the bank took in total deposits of CNY 54.8 billion, up 23.3% compared to the figure at the yearend of 2009; while it offered total loans of CNY 36.1 billion, up CNY 4.94 billion from last yearend. Based in Tianjin, China Bohai Bank has set the goal to become a publicly-traded lender in due time from 2011 to 2015. The northern provincial-level city-based lender attaches much importance to economically developed Guangzhou and Shenzhen. In the coming five years, the bank has the plan to acquire or merge smaller lenders.