BoCom and Commonwealth Bank form insurance JV
BoCommLife banks on CBA's expertise in bancassurance for its future success.
The Bank of Communications (BoCom), which is 19 percent owned by U.K. banking giant HSBC Holdings PLC, is the first Chinese lender to make an investment in the domestic insurance sector, which had premium income of more than CNY1 trillion (US$146 billion) last year, since Beijing loosened regulations.
BoCom owns 51 percent of the venture, called BoCommLife Insurance Co., while Commonwealth Bank holds the remaining 49 percent, as stated in a report in the Wall Street Journal.
"Combined with the Commonwealth Bank's experience in bancassurance, we are confident of a strong and successful future for BoCommLife," Simon Blair, group executive of Commonwealth Bank's International Financial Services, said in a statement.
"Our goal is to create a leading and competitive life insurer that covers the national China market."
China's banking and insurance regulators signed an agreement allowing lenders to take stakes in insurers for the first time in January 2008, but there had been no material progress until November last year as the global financial crisis raised concerns about insufficient regulatory oversight over cross-sector operations.
