Ping An Says 'Worst Is Over' With Its Fortis Deal

飞雪寒冰

Ping An Insurance (Group) Co. of China (SH 601318; HK 2318) said it has made sufficient provisions for investment losses due to its exposure to struggling European financial group Fortis, with group president Louis Cheung saying “the worst is over” in terms of one-off risks.



Cheung added at a media briefing in Shanghai on April 9 that Ping An welcomes an improved restructuring plan for Fortis but will keep an “open attitude” ahead of a vote this month.



The Fortis investment pummeled Ping An’s results in 2008, with net profit falling 98.6 percent to 268 million yuan under international accounting standards after it wrote down 22.8 billion yuan.



Partly in response to the Ping An case, the China Insurance Regulatory Commission ordered the insurance sector to conduct risk assessments this week to identify any exposures that could blow up their portfolios.



Shareholders of Fortis, in which Ping An is the largest single shareholder with a 4.99 percent stake, are due to vote on April 28-29 on the sale of its former banking arm to France's BNP Paribas SA

飞雪寒冰

In February, Ping An, part of a narrow majority, blocked a previous plan for BNP to purchase Fortis’ bank and insurance assets from the Belgian government.



Ping An has said the Belgian government's role in dismantling Fortis amounted to expropriation. It is seeking compensation from Belgium over its losses.



Cheung said Ping An will buy an “appropriate” amount of A-shares as well as some H-shares in 2009, although the company believes stock markets will continue to fluctuate during the year.



The insurer also noted its premium income rose 38 percent in the first two months, outperforming the sector’s 13 percent growth.