Ping An Insurance and Other Insurers Invest in Bank Stocks for High Dividends

Ping An Insurance Group is investing in bank stocks for high dividends. The Chinese insurer operates in five segments, including life and health insurance, property insurance, banking, asset management, and technology. The company is seeking high dividends from its investments in bank stocks, which are expected to generate returns.

Ping An Insurance Group Co., one of China's largest insurers, has significantly increased its investments in the nation's biggest banks, betting on high dividend yields despite the challenges faced by the banking sector. The company has boosted its holdings of Hong Kong-listed bank stocks to a combined HK$180 billion ($23 billion) since late 2024, according to Bloomberg calculations [1].

Ping An's aggressive buying spree has pushed its stake in Industrial & Commercial Bank of China Ltd. to as high as 18%, while holdings in China Merchants Bank Co. and Agricultural Bank of China Ltd. rose to at least 15%. The insurer's preference for bank stocks is driven by their quasi-fixed-income attributes and state backing, which offer low volatility and high dividends [2].

The strategy reflects a growing demand for high-yielding assets amid limited investment options. While Chinese authorities have guided state-backed insurers to allocate 30% of their new premiums to onshore listed shares annually, Hong Kong-traded bank shares offer more appeal with cheaper valuations and high dividend yields. This trend is not limited to Ping An; other Chinese insurers, such as Rui Life Insurance Co. and New China Life Insurance Co., have also been actively buying bank stocks [2].

The aggressive purchases have fueled a sector-wide rally, sending a gauge of Hong Kong-listed Chinese banks to a seven-year high. China Citic Bank, one of the best performers this year, hit record highs, while AgBank closed at the highest since its 2010 listing on Tuesday [2].

However, the sustainability of the rally remains uncertain. The banks are still contending with a contraction in margins, high funding costs, and weak financing needs from the real economy. The stock performance has deviated from banks' fundamentals, and it remains to be seen whether their credit expansion will translate into real economic activity [2].

Ping An's total investment portfolio of insurance funds is 5.9 trillion yuan ($822 billion), and the insurer has diversified its portfolio by also adding non-bank shares to cut risks. The company aims to maintain a balanced approach, investing in both growth stocks and high-dividend value stocks [2].

In a separate development, Sberbank, Russia's largest lender, has seen a 50% increase in the number of Chinese small and medium-sized businesses opening bank accounts in the past year. This growth is part of a broader trend of increased trade between Russia and China, which has soared since Western countries shunned Moscow over the conflict in Ukraine. However, foreign direct investment into Russia has fallen sharply to $3.3 billion in 2024, the lowest amount since 2001 [3].

References:
[1] https://news.bloomberglaw.com/insurance/ping-an-builds-23-billion-stake-in-china-banks-on-dividend-bet
[2] https://www.bloomberg.com/news/articles/2025-06-24/ping-an-builds-23-billion-stake-in-china-banks-on-dividend-bet
[3] https://www.cryptopolitan.com/sberbank-records-50-spike-in-china-clients/