HSBC Insurance (Asia Pacific) Holdings Ltd on January 21 announced that it has spent 1.88 trillion VND (roughly 101.8 million USD) for the increase of its stake in Bao Viet Insurance Corporation from 10 percent to 18 percent through purchasing over 53.68 million new shares from the corporation.
HSBC in September 2007 acquired a 10-percent interest in Bao Viet, a leading insurance and financial services group in Vietnam. Under terms of the original agreement, HSBC had an option to purchase an additional 8 percent of Bao Viet’s shares from the Ministry of Finance (MoF).
Therefore, in October 2009 the MoF gave its formal consent for this option to be implemented through the issue of new Bao Viet shares to HSBC.
“The HSBC’s decision to increase its stake in Bao Viet Insurance Corporation reflects the group’s confidence in the long-term growth prospects of both Bao Viet and Vietnam,” stated Michael Geoghegan, HSBC’s chief executive.
"With an insurance penetration rate of only 1.4 percent of GDP, the potential for the sector’s growth in Vietnam remains great. We keep our commitment to invest in the country's development and consider Vietnam as a key market in the Asia-Pacific region," said David Fried, chairman and chief executive officer of HSBC Insurance in the Asia-Pacific region.