China's BoCom aims for insurance, brokerage business

Published: 28 Apr 2009 03:17:59 PST

SHANGHAI, April 28 - Bank of Communications (BoCom), China's fifth-largest lender, said on Tuesday it aims to expand into insurance and securities businesses in mainland China as lending and profit growth slows amid a cooling economy.

BoCom, 19 percent owned by HSBC Holdings, has submitted an application to the central government to start an insurance business, Vice President Qian Wenhui told reporters in Shanghai, declining to give details.

BoCom plans to buy a stake in Shanghai-based China Life-CMG Insurance Co, a joint venture between China Life Insurance Co Ltd and Commonwealth Bank of Australia, the official China Securities Journal reported earlier this month.

BoCom and bigger domestic rivals such as Industrial and Commercial Bank of China and Bank of China have posted slower earnings growth on higher bad loan provisions and narrower interest margins.

BoCom's first-quarter net profit edged up 0.53 percent, slowing from a rate of 40 percent for its full-year 2008 earnings, as a string of interest rate cuts hurt margins.