China's largest bank, Industrial & Commercial Bank of China Ltd., will buy a 60% stake in AXA-Minmetals Assurance Co. for US$179.6 million (1.2 billion yuan), reports the Wall Street Journal.
AXA-Minmetals is an insurance joint venture between French insurer AXA SA and China Minmetals Corp. According to the Journal, the acquisition will give ICBC direct access to the lucrative insurance market. Citing data from China's insurance regulator, the Journal says insurance premiums in the mainland grew 34% in the first half of 2010 from a year earlier to $119.8 million (800 billion yuan).
While the deal is expected to generate significant returns for ICBC, the insurance business is still small compared to the company's banking operations, which will remain its core business, ICBC Chairman Jiang Jianqing told the Journal.