On April 11, 2006, Wang Zhaowen, the spokesman of BOC, disclosed to the media that BOC Hong Kong (Holdings) Limited (hereafter referred to as "BOC Hong Kong") had signed an agreement with BOC Group Insurance Company Limited (hereafter referred to as "BOC Insurance") to spend HKD900 million to purchase 51% of the shares of BOC Group Life Insurance Company Limited (hereafter referred to as "BOCG Life") conditionally.
The BOC-holding BOC Hong Kong is one of the major commercial bank groups and note-issuing bank in Hong Kong. All of the acquisition fund will be paid in cash and the acquisition is expected to be done around June 1, 2006.Besides, approvals from independent shareholders of BOC Hong Kong and Hong Kong insurance supervisory authority are also needed.
Established on 12 March 1997, BOCG Life is a wholely-owned Hong Kong subsidiary of BOC Insurance under BOC Group. At present, it is mainly engaged in life insurance service and other life insurance business relevant to investment products and retirement scheme management. Its channels for distribution in a large part take advantage of the board distribution network of Bank of China (Hong Kong) Limited-an essential operating subsidiary of BOC Hong Kong. By the end of 2005, the total assets of BOCG Life reached HKD9.34 billion, total revenues HKD3.69billion, and after-tax profits HKD200 million.
According to Wang Zhaowen, this acquisition embodied an important step to the omnipotent financial group. It will greatly strengthen the product design capability of BOC Hong Kong, widen the coverage of services and improve the overall profitability. The step, therefore, is favorable to the long-term development of BOC Hong Kong.
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