China Merchants Bank (CMB) said on Monday that it would buy a stake in CIGNA & CMC Life Insurance Co. to expand its insurance business.
CMB, the country's largest credit card issuer, said that it had signed an agreement with Shenzhen-based Din Zun consulting company-- which is also under China Merchants Group -- to take over all 50 percent of the CIGNA & CMC shares that it held for 142 million yuan (about 20 million U.S. dollars).
The acquisition must be approved by the China Banking Regulatory Commission and the China Insurance Regulatory Commission.
Founded in summer 2003 with a registered capital of 320 million yuan, CIGNA & CMC is a Sino-American joint venture that offers life, casualty and health insurance.
U.S.-based CIGNA Company holds the other 50 percent of the shares.
CMB has been an agent for CIGNA & CMC's insurance policies and earned 66.39 million yuan in service fees from the company during the first 11 months of last year, a 3.5-fold increase from 2006.
Acquiring the stake in CIGNA & CMC would improve the bank's revenue structure and sharpen its competitive edge, according to CMB.
Source:Xinhua
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