China Merchants Bank to acquire 50 per-cent stake in CIGNA&CMC

China Merchants Bank (CMC), the country's sixth largest lender, announced that it would earmark RMB 142 million for a 50% stake in CIGNA & CMC Life Insurance Co. (CIGNA & CMC), a joint venture between U.S.-based CIGNA International and a subsidiary of China Merchants Holdings, sources reported.

CMC has signed an agreement with the holder, Shenzhen Dingzun Investment & Management Consulting Co yesterday. But the deal is still subject to regulatory approvals. This move is described as CMC's fast response to the Document 160 drafted by the China Banking Regulatory Commission (CBRC) and China Insurance Regulatory Commission (CIRC) earlier this year, aiming at strengthening cooperation between banks and insurance companies.

The Shenzhen-based CIGNA & CMC offers life, accident and health insurance products. Its business performance fluctuated in recent two years, with a loss of RMB 14.72 million in 2006, and net profits of RMB 40.1 million in 2007, according to figures.