Ping An: no need to make impairment provisions on investment in Fortis at present stage

Time: 2008-07-03 Source: Font: big middle small


Hong Kong, July 3, 2008 – In response to recent news reports indicating that significant impairment provisions might have to be made by the Group on its investment in Fortis, Ping An Insurance (Group) Company of China, Ltd. (“Ping An” or the “Group”, HKEx: 2318) clarified in an announcement today that it sees no need to make impairment provisions on such investment as at 30 June 2008 in accordance with its investment strategy to hold Fortis shares for the long term, as well as related accounting policies.  Ping An stated that its equity stake in Fortis is classified as available-for-sale financial assets at fair value.


Ping An purchased an approximately 4.18% stake in Fortis in the secondary market last November, making itself the single largest shareholder of the Belgian bank.  In April this year, Ping An fortified its relationship with Fortis by entering into an agreement that formalized the establishment of a global asset management partnership between the two companies.  Under the agreement, Ping An agreed to acquire a 50% stake in Fortis Investments, the global asset management arm of Fortis, for a consideration of EUR2.15 billion.  Both parties stated that the partnership, being a long-term investment opportunity, would be conducive to mutual interests and even stronger collaboration moving ahead.


Mr Ma Mingzhe, Chairman and Chief Executive Officer of Ping An commented, "This long-term investment in Fortis not only offers us investment returns but also bears strategic significance and value from a wider perspective.  Given the similarity of our business models, Ping An is privileged to leverage on this cooperative opportunity to benefit from Fortis’ s wealth of experience in cross-selling, risk management and product innovation with a view to speeding up the pace of our development of a global asset management platform and benefiting from related synergies.  This works perfectly well towards the long-term development strategy of the company.”