China life profit rises on gains from first-half stock rally

The Pak Banker - - 6BUSINESS -

China Life In­sur­ance Co., the na­tion's largest in­surer, said profit rose 7.7 per­cent last year as in­vest­ment re­turns ben­e­fited from a rally in the na­tion's stock mar­ket in the first half. Net in­come climbed to 34.7 bil­lion yuan ($5.3 bil­lion), or 1.22 yuan a share, from 32.2 bil­lion yuan, or 1.14 yuan a share, a year ear­lier, the com­pany said in a state­ment to the Shang­hai stock ex­change. That com­pares to the me­dian es­ti­mate of 35.4 bil­lion yuan by 19 an­a­lysts sur­veyed by Bloomberg. The com­pany said in Jan­uary that prof- it rose about 5 per­cent to 10 per­cent. The 60 per­cent surge in the bench­mark Shang­hai Com­pos­ite In­dex through its peak in June helped China Life se­cure an in­crease in full-year profit, even as en­su­ing mar­ket de­clines partly wiped off gains and dragged net in­come growth from 71 per­cent in the first half.

The Bei­jing-based in­surer has spent about 36 bil­lion yuan since De­cem­ber buy­ing stakes in banks, di­ver­si­fy­ing its profit mix to limit the im­pact of China's volatile fi­nan­cial mar­kets. The busi­ness took a hit in the fi­nal three months of 2015: fourthquar­ter profit slumped 81.5 per­cent in the pe­riod from a year ear­lier, ac­cord­ing to Bloomberg cal­cu­la­tions based on to­day's and his­tor­i­cal data. Net in­come had fallen 74 per­cent in the third quar­ter, the com­pany said ear­lier.

In­vest­ment in­come jumped 35 per­cent to 145.5 bil­lion yuan in 2015, ac­cord­ing to the state­ment. The com­pany recorded 2.2 bil­lion yuan in fair­value losses on in­vest­ments, re­vers­ing 3.7 bil­lion yuan of gains in 2014. Net pre­mi­ums rose 10 per­cent, ac­cord­ing to the state­ment. New busi­ness value, which gauges the prof­itabil­ity of new life poli­cies sold, surged 36 per­cent.

China Life, which doesn't have a bank­ing arm, last month boosted its hold­ings in China Guangfa Bank Co. to 43.7 per­cent from 20 per­cent by ac­quir­ing stakes from Cit­i­group Inc. and In­ter­na­tional Busi­ness Ma­chines Corp. That fol­lowed its 13 bil­lion yuan in­vest­ment in Postal Sav­ings Bank of China Co. in De­cem­ber.

Smaller Ping An In­sur­ance (Group) Co. re­ported a 38 per­cent jump in net in­come last year, thanks partly to a 10 per­cent profit in­crease at its bank­ing unit. China Life's shares fell 0.9 per­cent to HK$ 19.32 on Wed­nes­day, ex­tend­ing this year's de­cline to 23 per­cent.

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