HSBC in talks to sell its 15.6 % stake worth $9 bn in China's Ping An Insurance

HSBC, Europe's biggest bank, today said that it is in talks to sell its 15.6 per cent stake worth around $9 billion in China's second-largest insurer Ping An Insurance (Group) Co.

London-based HSBC said in a statement that it has "from time to time received approaches regarding its shareholding and confirms that it is in discussions which may or may not lead to the sale of the shares." The lender added that it will make further announcements "if or when appropriate."

Citing unnamed sources, Chinese-language Hong Kong Economic Journal, had earlier reported that Charoen Pokphand Group, which is backed by Thai businessman Dhanin Chearavanont, may be one of the parties interested in buying the stake.

The paper said that the bank plans to sell all of its 1.23 billion Hong Kong-traded shares in Ping An, which represents about 40 per cent of Ping An's Hong Kong-traded shares and 15.6 per cent of all Ping An stock.

Two years before Ping An's 2004 IPO, HSBC had initially acquired a 10 per cent stake the insurer for $600 million, and bought an additional 9.91 per cent in 2005 for $1.04 billion, taking its total interest in Ping An to 19.91. But its stake was diluted to 15.6 per cent following a share placement in 2011.

HSBC, which has  set aside $1.5 billion for fines it may have to pay as criminal charges from the ongoing US anti-money-laundering probe, has recently been selling some of its non-core assets around the globe (See: HSBC says laundering probe could cost it over $1.5 bn). 

It sold its general insurance business in Hong Kong, Singapore and Mexico in March to Paris-based Axa SA for about $494 million and its operations in Argentina and interest in a unit of Hang Seng Bank to Sydney-based QBE Insurance Group for about $420 million.