HSBC Holdings plc said yesterday it received regulatory approval to set up a Chinese mainland insurance joint venture with National Trust Ltd as it steps up efforts to tap the nation's growing insurance sector.

HSBC Insurance (Asia) Ltd has gained the nod from the China Insurance Regulatory Commission to form the venture with its Chinese partner within 12 months, HSBC said in a statement.

Europe's largest bank will own a 50-percent stake in the insurance venture with National Trust taking the remainder, the statement said. No financial terms were released yesterday.

"The growing personal wealth base and aging population in China are prompting strong demand for insurance and retirement services," said David Fried, chairman and chief executive officer of HSBC Insurance for Asia-Pacific.

On China's mainland, HSBC now holds a 16.8-percent stake in Ping An Insurance, the nation's No. 2 life insurer, and a 24.9-percent stake in a joint venture insurance broker Beijing HSBC Insurance Brokers Ltd.

The lender also has representative offices in life and general insurance in Beijing, Shanghai and Guangzhou and an insurance broking representative office in Beijing, according to the statement.

The application to set up the insurance joint venture was made under terms of the Closer Economic Partnership Agreement between the mainland and Hong Kong, signed in June 2003, the statement said.

HSBC noted that some of the terms of the joint venture are subject to discussions with National Trust, a privately-held trust firm offering financial services, including asset management, investment banking and wealth management.

"The new business will support our expanding wealth management, premier and private banking businesses," said Clive Bannister, group managing director, insurance, HSBC Holdings Plc. "Our growth and investment focus in Asia's fast growing emerging markets is an integral part of the group's strategic thinking."

Elsewhere in Asia, HSBC Insurance recently formed a joint venture with Canara Bank and Oriental Bank of Commerce, two state banks in India. It also announced a plan on September 13 to buy 10 percent of Bao Viet Insurance & Finance Group, Vietnam's biggest state-run insurer, for US$255 million.

(Xinhua News Agency September 28, 2007)