HA NOI (VNS) — HSBC Insurance sold its entire 18 per cent in Baoviet Holdings to Japanese insurer Sumitomo Life for about VND7 trillion (US$340 million) yesterday, ending its five-year tie with Viet Nam's biggest insurer .
HSBC, which paid $360 million to buy the 18 per cent stake in Baoviet in two tranches in 2007 and 2009, said the deal marks further progress of its plan to exit non-core businesses.
"This transaction represents further progress in the execution of the Group's strategy, allowing us to focus our capital and resources on the growth of our core businesses," said Peter Wong, CEO of HSBC Asia Pacific."We are proud of the success of our five-year partnership with Baoviet and wish it continued success."
Earlier this month the British bank sold a minority stake in China's Ping An Insurance after selling its general insurance business to French insurer Axa and Australia's QBE Insurance Group Ltd earlier this year.
According to HSBC, the transaction with Sumitomo is expected to be completed during the first quarter of 2013. The bank has committed to remain focused on building a strong, sustainable business in Viet Nam.
HSBC shares rose 0.03 per cent yesterday, bringing the company's value to $125.48 billion, according to Yahoo! Finance.
The transaction is the latest Japanese acquisition in Southeast Asia as its banks and insurers are stepping up overseas expansion.
Sumitomo Life, one of Japan's top four life insurers with over 100 years of development, sells its products via a network of 300 banks and financial institutions.
According to Swiss Re's Sigma Report, Viet Nam's insurance market was worth just $818 million in 2011 in terms of premiums, compared with Japan's $524.7 billion that year.
Viet Nam's life insurance penetration rate, a measure of how much a country's population spends on life insurance, was just 0.7 per cent in 2011, compared with 8.8 per cent in Japan and 3.6 per cent in the United States. — VNS