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China Taiping takes USD 425mn stake in Shanghai Rural
Posted on Friday, 15 March 2019 12:55
China Taiping Insurance Holdings is buying a 4.8 per cent equity interest in mainland-incorporated Shanghai Rural Commercial Bank for CNY 2.86 billion (USD 425.94 million) from Shenzhen Legend Science Park.

The group is carrying out the deal via subsidiary Taiping Life Insurance (TPL), in which it owns a 75.1 per cent stake and Ageas Insurance International the 24.9 per cent balance.

Incorporated in August 2005, Shanghai Rural had total assets over CNY 800.00 billion, about 400 branches and net profit of CNY 6.66 billion in the 12 months to 31st December 2017 (FY 2016: CNY 5.98 billion).

The lender offers domestic deposits and short-, mid- and long-term loans, domestic and foreign settlements, bill acceptance and discount, government bonds, inter-bank borrowing and lending, credit investigation, and custodian services, among other things.

Shanghai Rural is currently working on a private placement of shares, which was first announced in 2018 and is yet to complete, to increase its registered capital from CNY 8.00 billion to CNY 8.68 billion.

The 414.90 million shares being sold by Legend Science represent a 4.8 per cent post-issue stake.

Following the purchase, TPL, which is mainly involved in underwriting direct life insurance contracts in China, will be eligible to nominate a director to Shanghai Rural’s board.

The purchase should also be beneficial to the company’s “overall assets composition and investment portfolio from a diversification, asset-liability matching, and risk-return perspective”.

It should also support expansion in Shanghai and the integration zone of the Yangtze River Delta, a region which plays a significant role in the country’s economy.

China Taiping’s subsidiaries are involved in the underwriting of direct life, property and casualty insurance, as well as in asset management, financial leasing, real estate and senior living investment and securities dealing, among others.

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