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Ping An raises stake in Shenzhen Development Bank

Ping An Insurance (601318.SH, 2318.HK), China’s largest insurer by market capitalization, announced that it will invest an additional US$3.1 billion to raise its stake in Shenzhen Development Bank (000001.SZ), the Wall Street Journal reported. The move comes as Ping An reported a 33% increase in its first-half net profit, mainly due to the strength of its banking operations. This is the second time in less than a month that Ping An is injecting cash into the Shenzhen-headquartered bank; Ping An raised its stake to 52% from 30% in a US$4.5 billion deal just weeks ago. “The capital replenishment will enable the bank to further expand its assets and businesses, and help it achieve sustainable profit growth,” SDB said in a statement, adding that its capital-adequacy ratio will rise to 13% after the deal’s completion. The bank held capital amounting to 10.58% of its risk-weighting assets as of June 30, just above the minimum capital-adequacy ratio of 10.50% required for medium-size Chinese banks.

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