A major Chinese insurer has become the biggest shareholder of UK-based HSBC Holdings, with its nearly $12bn stake demonstrating China's growing appetite for offshore equity investments, reports The Wall Street Journal.
Ping An Insurance (Group) Co of China's stake in the bank rose to more than 7% after a small purchase last week, a late Monday filing showed. The stake was about 5% in December.
Ping An has overtaken BlackRock, the world’s largest asset manager, which owned roughly 6.6% of HSBC based on its latest filing in October.
The investment also marks a reversal in the duo’s relationship: HSBC once owned a sizable stake in Ping An, but in 2012 sold its 15.6% holding to a conglomerate controlled by Thai tycoon Dhanin Chearavanont for $9.39bn.
HSBC said it welcomed Ping An as a long-term investor, and the two companies have enjoyed a strong and collaborative relationship over a long period.
For its part, the insurer said: “Ping An sees good prospects in HSBC’s development and HSBC has [a] relatively high dividend payout ratio, which are in line with the risk preference and return objective of insurance funds”. It characterised this as a purely financial investment of insurance funds.