Bobby Yip/Reuters
HSBC headquarters in Hong Kong.
HONG KONG – HSBC Holdings, one of the biggest banks in Europe, said on Wednesday that it would sell its entire stake in a leading Chinese insurer to a Thai conglomerate for 72.7 billion Hong Kong dollars ($9.4 billion).
HSBC said it would sell its 15.6 percent stake in Ping An Insurance, based in Shenzhen, China, to the Charoen Pokphand Group, controlled by the Thai billionaire Dhanin Chearavanont, in a deal to be financed partly by the China Development Bank, a policy lender wholly owned by the government of China.
HSBC, based in London, has been shedding assets to cut costs and streamline its business, and at the same time bolstering its balance sheet in the face of tighter global capital requirements for banks. Since Stuart T. Gulliver took over as chief executive at the beginning of 2011, the bank has sold more than 40 noncore assets and has booked about $4 billion in gains on those sales this year alone.
HSBC disclosed last month that it was in talks over a potential sale of its Ping An stake, which it started building in 2002. It said on Wednesday that it expected to report an after-tax gain of $2.6 billion on completion of the deal.
“This transaction represents further progress in the execution of the group’s strategy,” Mr. Gulliver said in a statement announcing the sale. “China remains a key market for the group.”
Founded in Hong Kong and Shanghai almost 150 years ago, HSBC operates 133 outlets in 33 branch offices in mainland China. After the sale of the Ping An stake it will keep minority investments in several Chinese lenders, including a 19.9 percent stake in the Bank of Communications that is worth about $10 billion at current share prices; a stake in Industrial Bank, based in Fujian Province; and an 8 percent stake in the Bank of Shanghai.
In the Ping An transaction, Charoen Pokphand, a conglomerate that includes businesses like the distribution of agricultural products and the operations of one of the world’s biggest chains of 7-Eleven stores, will purchase 1.2 billion Ping An shares from HSBC at 59 dollars apiece.
HSBC said it would transfer 21 percent of the shares to the Thai group on Friday. The sale of the remaining 79 percent of the shares at the same price is being financed partly with cash and partly by a loan from the China Development Bank to Charoen Pokphand, and the transfer of those shares is expected to be completed by Jan. 7, contingent on receiving approval from the China Insurance Regulatory Commission.
The New York Times reported last month that relatives of Wen Jiabao, the Chinese prime minister, once held a large, indirect stake in Ping An through an investment vehicle called Taihong, according to corporate records. Ping An declined to comment on The Times’s findings, and it is unclear whether the prime minister’s relatives still hold any stake in the insurer.
The Chinese government has declined to comment on whether the relatives of Mr. Wen controlled a fortune that at one time was worth $2.7 billion. Earlier, a Foreign Ministry spokesman sharply criticized the investigation by The Times into the finances of Mr. Wen’s relatives, saying it “smears China and has ulterior motives.”
Representatives of Ping An, HSBC, Charoen Pokphand and the China Development Bank did not immediately respond on Wednesday to phone calls and e-mails seeking comment on The Times’s reports about the Ping An stake held by Mr. Wen’s relatives.
Ping An, which was founded in 1988, has grown into one of the biggest insurance companies in the world. The company, which is not state-owned, appears to have benefited from a favorable regulatory environment. In addition to insurance operations, it has won control of a large bank, brokerage and trust company.
In a statement on Wednesday, Ping An said it welcomed Charoen Pokphand, or C.P. Group, as a “long-term strategic investor.” The Thai firm “has been an important partner in China’s reforms and opening-up and in supporting China’s economic and social development. C.P. Group has full confidence in Ping An’s strategies, corporate culture and business model, as well as in Ping An’s management team,” the insurer said.
After the Wednesday announcement, shares in Ping An rose 4.9 percent, to close at 60.50 dollars in Hong Kong, exceeding the stake sale price by 1.50 dollars and signaling that investors were confident the transaction would go ahead. Shares in HSBC rose 1.7 percent, to close at 80 dollars in Hong Kong, and are up about 35 percent this year.