(Xinhua)
Updated: 2008-05-06 16:56

BEIJING - China Merchants Bank (CMB) said on Monday that it would buy a stake in CIGNA & CMC Life Insurance Co. to expand its insurance business.

CMB, the country's largest credit card issuer, said that it had signed an agreement with Shenzhen-based Din Zun consulting company -- which is also under China Merchants Group -- to take over all 50 percent of the CIGNA & CMC shares that it held for 142 million yuan (about US$ 20 million).

The acquisition must be approved by the China Banking Regulatory Commission and the China Insurance Regulatory Commission.

Founded in summer 2003 with a registered capital of 320 million yuan, CIGNA & CMC is a Sino-American joint venture that offers life, casualty and health insurance.

US-based CIGNA Company holds the other 50 percent of the shares.

CMB has been an agent for CIGNA & CMC's insurance policies and earned 66.39 million yuan in service fees from the company during the first 11 months of last year, a 3.5-fold increase from 2006.

Acquiring the stake in CIGNA & CMC would improve the bank's revenue structure and sharpen its competitive edge, according to CMB.