Banking News
- Ping An eyes banking, rural market
Date: 6-Nov-2007 Sources: (Shenzhen Daily)
PING An Insurance, China's second-largest life insurer, is keen to boost its banking business and its branch network in rural areas in the next two to three years.
Ping An Insurance (Group) Co. of China Ltd. plans to spend two years making its banking business, which now accounts for about 10 percent of its overall profit, into a major contributor to the group, said Ping An's group chairman Ma Mingzhe yesterday.
'Our ultimate goal is to transform Ping An into a world-class financial services provider with a global reputation and business, not just a local insurer, within one or maybe two decades,'he said.
'The trend of offering clients financial products across sectors such as insurance, credit cards and wealth management may be gradual but must be inevitable in China,'he said, adding that insurance would still be the group's core business.
Ping An invested more than 1 billion yuan (US$134 million) in a new operations center in Shanghai and plans to build similar regional centers in relatively underdeveloped areas of central and southern China to reduce its personnel costs, he said.
Shenzhen-based Ping An is also interested in boosting its branch network in rural areas, with encouragement from regulators who are keen to develop the country's agricultural regions, said Ma, one of Ping An's cofounders.
'In fact, we have built more than 30 outlets in rural areas, where we find huge market potential,'he said.
'Chinese farmers are becoming richer, thanks to China's economic growth, and they have a greater need for insurance and wealth management services than ever before.'
Ma declined to indicate whether Ping An would expand its rural network through acquisitions or by opening new branches.
But he said rural areas would be one of the group's major targeted markets in the next few years after it had built up a reputation in China's first-tier cities.
The government is eager to develop the financial services sector in rural areas to promote social stability and narrow the income gap with relatively wealthy urban centers such as Shanghai and Beijing.
Richard Jackson, president of Shenzhen Ping An Bank, the group's banking arm, said he would accelerate the expansion of the bank's branches in the next two years as it now operates outlets in only three cities: Shanghai in eastern China and Shenzhen and Fuzhou in the south.
The bank will also cooperate with Ping An's insurance team to promote wealth management and credit card services, said Jackson, adding that more than 70 percent of its credit card holders had already been Ping An insurance clients.
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