China to pump USD54bn into state banks, insurers

According to Business Recorder, China's finance ministry will lead capital injections totalling USD54 billion into state-run lenders and insurers, companies announced on Sunday. China Life Insurance, the largest life insurer in the country, is set to receive 35 billion yuan, equal to USD5.2 billion. China Taiping Insurance Group is slated to get 7 billion yuan.

People's Insurance Company of China has outlined a plan to raise as much as 15 billion yuan by issuing shares to the finance ministry, with the money earmarked for replenishing its capital. The finance ministry will also inject 10 billion yuan into China Export and Credit Insurance, while China Reinsurance will raise 3 billion yuan. The insurance sector is contending with falling profitability linked to prolonged low interest rates, and many small and mid-sized insurers are reporting weaker solvency ratios.

Separately, three state banks disclosed that they will collectively get 290 billion yuan in capital. China Life said the funds would strengthen its ability to withstand risks, while Taiping said the capital would help improve its solvency and related measures.