HSBC is buying 50 per cent of Fujian Asia Bank Limited for “not more than” US$20 million in cash, funded from internal resources. China Ping An Trust & Investment Co. Limited, a subsidiary of Ping An Insurance (Group) Company of China Limited, will purchase the remaining 50 per cent of Fujian Asia Bank.
Under the transaction agreement, China Ping An Trust & Investment Co. Limited will inject a further US$23 million into Fujian Asia Bank, enlarging its paid up capital to US$50 million and diluting HSBCs stake to an agreed 27 per cent. The bank will be renamed Ping An Bank Limited upon completion. The final consideration to be paid by HSBC will be determined at completion, expected by the end of the first quarter of 2004, following a valuation of Fujian Asia Banks assets.
Fujian Asia Bank was established in mainland China in 1993 as a Sino-Foreign Equity Joint Venture Bank. It had assets of US$32.7 million at 31 December 2002. Ping An Banks long term objective is to develop consumer banking businesses, including credit card and real estate mortgage lending businesses, as and when laws and regulations permit.