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MarketScreener Homepage  >  Equities  >  Hong Kong Stock Exchange  >  The Bank of East Asia, Limited    23   HK0023000190

THE BANK OF EAST ASIA, LIMITED

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16.64 HKD   +1.46%
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Bank of East Asia to sell insurance business with Elliott backing

09/23/2020 | 04:40am EST
File photo of the logo of Bank of East Asia displayed at a news conference in Hong Kong

Hong Kong-based Bank of East Asia Ltd (BEA) said on Wednesday it had decided to initiate a sale of its insurance business and seek a strategic partner for its mainland China business following a review of its portfolios and assets.

The bank said in March it had agreed to carry out the review, pausing four-year-old legal proceedings brought by activist investor Elliott Management demanding change at the lender.

BEA, whose main markets are Hong Kong and mainland China, said in its Wednesday statement that Elliott supported the move.

Shares of BEA rose as much as 4.7% to HK$16.40 after the announcement, recovering from two consecutive sessions of falls. They have lost about 20% over the last 12 months.

BEA has survived as an independent lender in a Hong Kong market dominated by majors HSBC, BOC Hong Kong and Standard Chartered, while several of the territory's other family-owned firms have been put up for sale amid deteriorating business conditions.

Having hired Goldman Sachs to assist with the review, BEA said it would seek to enter into a long-term exclusive distribution agreement with the buyer of BEA Life. The agreement would be a new source of revenue for the bank, it said.

BEA Life is a wholly-owned subsidiary of the bank in Hong Kong, and it reported gross written premiums of HK$4.8 billion ($620 million) in 2019, the lender said in a filing to the Hong Kong stock exchange.

In addition, BEA will look "to grow its core businesses, including through strategic and synergistic partnerships with, but not limited to, our Mainland China banking business," the filing said.

Elliott, which owns 7.5% of BEA according to data from Refinitiv's Eikon, had previously urged the bank to explore putting itself up for sale in an open letter to shareholders, saying that it was poorly run.

"The sale of BEA Life will be a good first step and we look forward to continuing our engagement while the Company follows through on this and the other important conclusions of the review," Jonathan Pollock, co-CEO and chief investment officer at Elliott Management Corporation, said in a BEA news release.

In 2016, Dah Sing Financial, another local Hong Kong bank, sold its life insurance business for $1.4 billion, the financial hub's most expensive insurance M&A, during a surge in outbound deals by deep-pocketed Chinese investors.

(Reporting by Alun John and Sumeet Chatterjee; Editing by Devika Syamnath, Muralikumar Anantharaman and Kim Coghill)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
BOC HONG KONG (HOLDINGS) LIMITED -1.96% 24.95 End-of-day quote.-7.76%
DAH SING FINANCIAL HOLDINGS LIMITED -0.88% 22.55 End-of-day quote.-26.55%
HSBC HOLDINGS PLC 1.76% 404.85 Delayed Quote.-31.60%
STANDARD CHARTERED PLC 0.54% 463.7 Delayed Quote.-34.91%
THE BANK OF EAST ASIA, LIMITED 1.46% 16.64 End-of-day quote.-4.37%
THE GOLDMAN SACHS GROUP, INC. -0.48% 235.4 Delayed Quote.2.87%
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Financials
Sales 2020 16 382 M 2 114 M 2 114 M
Net income 2020 2 514 M 324 M 324 M
Net Debt 2020 - - -
P/E ratio 2020 20,6x
Yield 2020 2,36%
Capitalization 47 949 M 6 186 M 6 186 M
Capi. / Sales 2020 2,93x
Capi. / Sales 2021 2,87x
Nbr of Employees 9 670
Free-Float 47,5%
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Technical analysis trends THE BANK OF EAST ASIA, LIMITED
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TrendsBullishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus UNDERPERFORM
Number of Analysts 11
Average target price 14,95 HKD
Last Close Price 16,44 HKD
Spread / Highest target 21,7%
Spread / Average Target -9,07%
Spread / Lowest Target -28,2%
EPS Revisions
Managers
NameTitle
Man Kiu Li Co-Chief Executive Officer & Executive Director
Man Bun Li Co-Chief Executive Officer & Executive Director
Kwok Po Li Executive Chairman
Hon-Shing Tong Chief Operating Officer & Deputy CEO
Dawn Tao Chief Financial Officer
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