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HSBC Insurance (Asia) Ltd, an indirect subsidiary of The Hongkong and Shanghai Banking Corporation Limited, has received approval from the China Insurance Regulatory Commission (CIRC) to form a joint venture insurance company with Beijing based strategic partner National Trust Limited.

Today's announcement is part of a two-step approval process. The final formation and launch of the joint venture is subject to the joint venture partners meeting certain CIRC requirements within a period of 12 months. Upon meeting the CIRC requirements, the regulator will give final approval to open for business, at which time the joint venture will be formed. Some of the terms of the joint venture are also the subject of discussions with National Trust.

The business will complement the HSBC Group's existing China operations where HSBC is already the largest international bank. In mainland China insurance, HSBC currently has a 16.8 per cent stake in Ping An Insurance and a 24.9 per cent stake in a joint venture insurance broker, Beijing HSBC Insurance Brokers Limited. HSBC also has representative offices in life and general insurance in Beijing, Shanghai and Guangzhou and an insurance broking representative office in Beijing.     

Elsewhere in Asia, HSBC Insurance recently formed a joint venture with Canara Bank and Oriental Bank of Commerce, two State banks in India, which together offer access to over 40 million customers through 3,600 branches across the country. Earlier this month, HSBC made the biggest ever insurance investment in Vietnam, acquiring a 10 per cent stake in leading insurance and financial services group, Vietnam Insurance Corporation (Bao Viet). We also opened our life insurance operations in Taiwan today.

Clive Bannister, Group Managing Director, Insurance, HSBC Holdings plc, said: "We're delighted and honoured to receive this approval. Our growth and investment focus in Asia's fast growing emerging markets is an integral part of the Group's strategic thinking and the new business will support our expanding wealth management, Premier and Private Banking businesses. We very much look forward to working closely with our joint venture partner and the regulator in the coming months towards completion of the approval process".

David Fried, Chairman and Chief Executive Officer of HSBC Insurance for Asia-Pacific, said: "The growing personal wealth base and ageing population in China are prompting strong demand for insurance and retirement services. Our extensive experience in offering a wide range of insurance products to many markets globally as well as our unmatched expertise in bancassurance will provide invaluable advantages for operating in China's emerging insurance industry."

It is anticipated HSBC will take 50 per cent of the joint venture company, with National Trust taking the remainder. National Trust is a privately held trust company authorised by China Banking Regulatory Commission to offer comprehensive financial services throughout China. The core businesses of National Trust are asset management, investment banking and wealth management. National Trust was voted one of the most influential brands in the trust industry in 2006.

Application to form the joint venture with National Trust was made under the terms of the Mainland China - Hong Kong SAR Closer Economic Partnership Arrangement (CEPA), signed in June 2003, which made certain trade and investment terms available to Hong Kong residents and enterprises, including banks wishing to enter or invest in certain mainland China economic sectors such as insurance.

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1. HSBC Insurance (Asia Pacific) Holdings Limited
HSBC Insurance (Asia Pacific) Holdings Limited, a wholly owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited, is the parent company of four underwriting companies, collectively known as HSBC Insurance: HSBC Insurance (Asia) Limited; HSBC Life (International) Limited; HSBC Insurance (Singapore) Pte Limited; and HSBC Amanah Takaful (Malaysia) Sdn Bhd (49 per cent held). HSBC Insurance offers customers the security, confidence and convenience of doing business with one financial services organisation. It has offices in the Hong Kong Special Administrative Region (SAR), the Macau SAR, Singapore and Malaysia. In mainland China, it has representative offices in Beijing, Shanghai and Guangzhou. HSBC Life also opened a representative office in Hanoi, Vietnam in January 2007 and began operating in Taiwan in September 2007. HSBC Insurance (Asia Pacific)'s total assets stood at HK$100 billion at the end of June 2007.

2. The Hongkong and Shanghai Banking Corporation Limited
The Hongkong and Shanghai Banking Corporation Limited is the founding and a principal member of the HSBC Group which, with over 10,000 offices in 83 countries and territories and assets of US$2,150 billion at 30 June 2007, is one of the world's largest banking and financial services organisations.

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