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September 25, 2020

Hong Kong’s Bank of East Asia to sell insurance unit

By Verdict Staff

Bank of East Asia (BEA), a major lender based in Hong Kong, has decided to divest its life insurance unit, BEA Life.

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The move follows the lender’s recent strategic review of its portfolio of businesses and assets. It is expected to enable the BEA to bolster its profits and stock performance.

BEA said in a statement: “As an immediate output of the strategic review, the Bank has decided to initiate a sale process for BEA Life in order to enhance the value of the Bank’s business, improve its financial position and enable its management team to focus on its core banking operations in Hong Kong and Mainland China.”

BEA Life, which is a wholly-owned subsidiary of the bank, offers a range of life insurance products to both individual and corporate customers in Hong Kong, through the bank’s branches and online channel.

As part of the sale process, BEA plans to enter into a long-term exclusive distribution agreement with BEA Life buyer to sell insurance offering through its banking platform.

Additionally, the bank intends to identify strategic and synergistic partnerships to further develop its banking business in Mainland China as well as in other regions.

BEA co-chief executives Adrian Li Man-kiu and Brian Li Man-bun said: “With a more nimble business, we will be better positioned to pursue our strategic priorities, thereby strengthening our core operations, supporting our growth initiatives and optimising shareholder return.”

According to reports, people familiar with the insurance business said the unit, with gross written premiums of HK$4.8bn ($619.3m) last year, could fetch between $450m and $600m.

Goldman Sachs will act as the financial advisor to BEA for the sale of BEA Life.

Free Report
img

Gain valuable insight on the Motor Insurance industry outlook for Asia Pacific

Asia-Pacific was the fastest-growing region globally during the review period (2016-2020), recording growth at a CAGR of 2.7%. China was the market leader, accounting for 52.9% of the region’s motor insurance premiums in 2020. To help you make the most of this significant growth, GlobalData’s has put together a comprehensive overview of the Asia Pacific motor insurance industry, including market sizing and forecasts. Read ‘Motor Insurance Industry Outlook in Asia Pacific’ for:
  • Analysis of leading insurers in the region
  • Details on regulatory requirements, including licensing rules, capital requirements, taxation regimes, and ownership quotas
  • Analysis of the impact of COVID-19 on the industry
  • Insight into key trends, technology developments, and potential disruptors in the motor insurance industry
  • Recent M&A activity in the motor insurance industry
Improve your business strategy with our extensive report. Download it for free, now.
by GlobalData
Enter your details here to receive your free Report.

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