Ping An Insurance Group, China's second biggest life insurer, said on Saturday its net profit decreased 12.2 percent in the first half this year on unstable world capital market, offset growth in premiums, and weak investment returns.
The company saw its premium revenues grew 28.5 percent to 692.3billion yuan (99 billion U.S. dollars) in the first half, but its net profit declined 12.2 percent over the same period last year to stand at 7.31 billion yuan by June, Ping An said in a statement to the Shanghai Stock Exchange.
The company's Shenzhen-based headquarter alone, saw its net profit dropped to 339 million yuan by June from 1.14 billion yuan in the same month last year.
Analysts said Ping An's profit decline was partly a result of its big losses in Fortis investment.
Ping An bought a 4.18 percent stake in Belgian assets management firm Fortis for 1.81 billion euros in last November. However, Fortis shares had fallen more than 50 percent since then, largely due to the U.S. credit crunch. This had brought an approximately 815 million euro book-value loss for China Ping An.
Despite of its losses in investment returns, the company reported a sharp growth in its life insurance revenue. Profit of life insurance surged by 28.42 percent in the first half to hit 6.18 billion yuan.
"The snow disaster in earlier this year, nationwide inflation, and Sichuan earthquake had put the company on trail," it said." The company will seek breakthrough by enhancing financial risk management, reducing business cost, and improve non-capital market investments."
Ping An was listed in Hong Kong in 2004 and in Shanghai last year. Its Shanghai-listed A shares have dropped about 61 percent so far this year, while its Hong Kong-listed H shares decreased 42percent during the same period.
The insurer's total assets dropped to 643.6 billion yuan by June, representing a decrease of 1.2 percent from the same month last year.
Source: Xinhua
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