12th Nov 2007 08:33
HSBC Holdings PLC12 November 2007 HSBC EXPANDS IN KOREA THROUGH INSURANCE ACQUISITION HSBC Insurance (Asia-Pacific) Holdings Limited (HSBC Insurance) has entered intoan agreement with Hana Financial Group, one of South Korea's largest financialservices groups, to acquire 50 per cent less one share of its wholly ownedsubsidiary, Hana Life Insurance Company Limited (Hana Life), for a considerationof KRW53 billion (equivalent to US$58.4 million). The joint venture will allow HSBC to extend its growing insurance business toKorea, an economy whose insurance market is the second largest in Asia. It isalso part of a region-wide strategy to extend the Group's reach in insurance,where recent initiatives have been announced in high growth markets such asIndia, China, Vietnam, Taiwan and the Middle East. Under the terms of the agreement, HSBC Insurance and Hana Financial Group willhave equal representation on Hana Life's Board of directors. Hana Life wasestablished in 2003 to underwrite and distribute life insurance products forpersonal and corporate customers. It currently has about 113,000 policies inforce and premium income was KRW207 billion* (equivalent to US$228.3 million)for the year ending on 31 March 2007. Total assets were KRW705 billion*(US$777.5 million) with KRW624 billion* (US$688.1 million) of assets undermanagement as at 31 March 2007. The company employs around 120 people andbenefits from access to Hana Financial Group's seven million customers throughmore than 700 branches. Clive Bannister, Group Managing Director, Insurance, HSBC Holdings plc, said:"Today's announcement represents an exciting opportunity for HSBC Insurance tocontribute to Asia's third largest economy and the world's seventh biggestinsurance market with premium volumes of over US$65 billion. It ties incompletely with our stated goals of expanding in Asia and aim of becoming a topten global insurance player, with a focus on life and pensions and increasinginsurance-related earnings over time to 20 per cent of total Group profits." The share purchase is subject to certain conditions being met and regulatoryapprovals being obtained. The cash consideration will be met by HSBC Groupinternal resources. This is HSBC's fifth insurance-related announcement in Asia in the last twomonths. In September, the bank confirmed a 10 per cent stake in Vietnam'sleading insurance provider Vietnam Insurance Corporation (Bao Viet), formalisedan agreement to establish a life insurance joint venture in India that will haveaccess to 40 million customers nationwide, received approval to form a jointventure insurance company in China and opened a life insurance office in Taiwan.In October, the bank also launched a new insurance brokerage service in theMiddle East. * Extracted from results for year ended March 2007, prepared in accordance withKorean GAAP. Notes to editors: 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. HSBC in KoreaHSBC has had a continuous presence in Korea for over 110 years. It first enteredthe Korean market in 1897 in Jemulpo (Incheon), and returned in 1982 by openinga branch in Busan. Today, HSBC has 11 branches and five commercial bankingcentres, employing over 1,350 people. HSBC is one of the largest investorsamongst foreign banks in Korea. Total assets of HSBC Korea are KRW17, 458billion as of 30 June 2007. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
HSBC Holdings