BEIJING: Bank of Beijing, China's leading city commercial bank by market value, has been approved to buy 50 percent of shares of ING Capital Life Insurance Co, Ltd, becoming the first bank of its kind to enter the Chinese insurance industry.
In a statement to the Shanghai Stock Exchange on Friday, Bank of Beijing said that the purchase will cost 681.8 million yuan ($99.97 million), or 1.515 yuan per share.
The shares to be acquired by the bank were currently held by Beijing Capital Group Ltd (Capital Group).
The purchase has been approved by China Banking Regulatory Commission and China Insurance Regulatory Commission (CIRC). However, there are still administrative licensing examination and approval procedures to be done by the CIRC, according to the statement.
Before the deal, the ING Capital Life Insurance Co, Ltd, headquartered in Dalian, northeast China's Liaoning province, was jointly held by ING Insurance International B.V. and Capital Group.
Bank of Beijing said the deal will strengthen its bank-insurance business, elevate its comprehensive competitive power and promote its strategic cooperation with ING as well.
As a strategic investor, ING acquired 19.9 percent stake of Bank of Beijing with 1.78 billion yuan in 2005.
Shares of Capital Group opened higher Friday at 8.44 yuan per share, compared with the previous close of 8.22 yuan, on the selling message. However, shares of Bank of Beijing opened lower at 15.50 yuan per share compared with the previous close of 15.82 yuan.