13th Sep 2007 13:06
HSBC Holdings PLC13 September 2007 HSBC ENTERS STRATEGIC RELATIONSHIP WITH TOP VIETNAM INSURER, BAO VIET *** HSBC, Asia's pre-eminent international bank, *** reinforces emerging markets presence *** Deal is largest insurance investment in Vietnam *** *** In line with HSBC's strategy of investing in high growth markets *** *** Reinforces aim to be top 10 global insurance player *** HSBC has entered into an agreement to acquire a 10 per cent stake in Vietnam'sleading insurance and financial services group, Vietnam Insurance Corporation(Bao Viet), for VND4,121 billion (approximately US$255 million) as a result ofwhich HSBC becomes the company's sole foreign strategic partner. Under its strategic partnership with Bao Viet, HSBC will offer the Vietnamesecompany technical assistance across all its businesses, with a focus on furtherenhancing its insurance capabilities. This will include the secondment ofspecialist employees and the provision of training to Bao Viet. Headquartered in Hanoi, Bao Viet provides a diverse range of financial productsand services to the rapidly growing domestic market. Through its 126 branchesand 400 sub-branches, 5,000 employees and 40,000 agents, the company is marketleader in both life and general insurance measured by premium income. BaoVietInsurance is Vietnam's largest general insurer with a market share of 35.2 percent and 20.2 million policyholders in 2006, while BaoViet Life has consistentlybeen one of the top life insurers in Vietnam with 1.6 million life policies inforce. The Bao Viet group had total assets of US$1,039 million(1) at 31 December2006. Stephen Green, Group Chairman of HSBC Holdings plc, said: "This investment andstrategic partnership with Bao Viet reflects a growing commitment to Vietnam,and is in line with HSBC's stated strategy of targeting investment at highgrowth markets with international connections. Vietnam is one of the fastestgrowing economies in Asia, with average GDP growth of more than 7 per cent inthe past 10 years. "We are honoured to be able to play a leading role through this landmarktransaction in the first equitisation of a major state-owned enterprise inVietnam. The deal also complements HSBC's growing presence in the country'sbanking sector - where we were the first foreign bank to receive approval for a15 per cent strategic investment in a domestic Vietnamese bank, Techcombank -and reinforces our commitment to build presence in emerging markets." Clive Bannister, Group Managing Director, Insurance, HSBC Holdings plc, said:"We are excited by the opportunities afforded by this strategic partnershipwhich extends our reach in the Asia-Pacific region, leverages our globalinsurance capabilities and reinforces our aim to be a top 10 global insuranceplayer. HSBC Insurance contributed US$1.6 billion to pre-tax profit in the firsthalf of 2007, and delivers 30 million policies in 44 countries and territories ayear. "Bao Viet, with its nationwide distribution network, its well-known brand nameand through its strategic partnership with HSBC Insurance, is ideally positionedto tap into the significant market potential present in Vietnam's fast expandinginsurance industry. I believe our partnership, through bringing together thebest of our people and resources, will assist Bao Viet in becoming a world classbusiness to the benefit of its customers, employees and public shareholders." Mr Le Quang Binh, Chairman of Bao Viet, said: "Our vision to remain the leadinginsurance and financial services company in Vietnam has now been strengthened byour strategic partnership with HSBC, one of the world's major financial servicescompanies. Together with HSBC, we plan to expand our product and service scope,further strengthen our staff qualifications and explore the use of bancassuranceto increase our business. "Vietnam's insurance market has seen rapid growth in the past decade but with apenetration rate of 1.5 per cent of GDP in 2006, it is clearly still in theearly stages of development. While Bao Viet has been a key player from the startin Vietnam's insurance industry, we plan to expand our role and lead thedevelopment of this exciting financial sector." Under the terms of the agreement, HSBC - through HSBC Insurance (Asia Pacific)Holdings Limited (HSBC Insurance) - has committed to hold its shares in Bao Vietfor a minimum period of five years. During this period, it has an option topurchase an additional 8 per cent of Bao Viet shares from the Ministry ofFinance (MoF) at the then prevailing market price. Additionally, HSBC hascertain pre-emptive rights to acquire shares currently owned by the MoF, subjectto HSBC's total shareholding being limited to 25 per cent within the first fiveyears of the agreement, and prevailing foreign ownership limits thereafter.HSBC's option and pre-emptive rights are subject to certain limitations andconditions. HSBC was advised on this investment by HSBC Corporate, Investment Banking andMarkets. Footnote:1: In accordance with Vietnamese GAAP. Notes to editors HSBC in VietnamHSBC first opened an office in Saigon (now Ho Chi Minh City) in 1870. The branchoperated for over 100 years, until its closure in 1975. HSBC also opened anagency of the bank at Haiphong in 1884 which was upgraded to a sub-office at thebeginning of the 1920s. This arrangement continued until the closure of theagency in 1954. The bank was able to revive its strong links with Vietnam whenrepresentative offices were opened in Ho Chi Minh City and Hanoi in 1992. The HoChi Minh City representative office became a full service branch in 1995 and abranch was opened in Hanoi in March 2005. HSBC Insurance (Asia Pacific) Holdings LimitedHSBC Insurance (Asia Pacific) Holdings Limited, a wholly owned subsidiary of TheHongkong and Shanghai Banking Corporation Limited, is the parent company of fourunderwriting companies, collectively known as HSBC Insurance: HSBC Insurance(Asia) Limited; HSBC Life (International) Limited; HSBC Insurance (Singapore)Pte Limited; and HSBC Amanah Takaful (Malaysia) Sdn Bhd (49 per cent held). HSBCInsurance offers customers the security, confidence and convenience of doingbusiness with one financial services organisation. It has offices in the HongKong Special Administrative Region (SAR), the Macau SAR, Singapore and Malaysia.In mainland China, it has representative offices in Beijing, Shanghai andGuangzhou. HSBC Life also opened a representative office in Hanoi, Vietnam inJanuary 2007. HSBC Insurance (Asia Pacific)'s total assets stood at HK$100billion at the end of June 2007. Vietnam Insurance Corporation (Bao Viet)Established on 15 November 1965, BaoViet has now become the leading Finance -Insurance Group in Vietnam. In addition to a network spread across 64 provincesnationwide, Bao Viet is also famous as a strong and prestigious trademark in theinsurance industry. With enormous financial capability and a thorough knowledgeof the domestic market, Bao Viet is the sole enterprise in Vietnam doingbusiness in both life and non-life insurance. Bao Viet was accredited as one ofthe biggest 25 enterprises in Vietnam, as well as a long-standing, trustworthyinsurer to all organisations and all people from a variety of social strata. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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