China’s Ministry of Finance just committed roughly $54 billion to backstop the country’s largest state-owned banks and insurers. The total package comes to about 360 billion yuan, split between a handful of institutions that collectively form the backbone of China’s financial system.
Where the money is going
The two biggest recipients are banks. Agricultural Bank of China is earmarked for up to 160 billion yuan, while Industrial & Commercial Bank of China, the world’s largest bank by assets, is set for up to 100 billion yuan. Both allocations are expected to flow through private A-share placements.
On the insurance side, China Life Insurance (Group) Co. is the standout, receiving 35 billion yuan, or about $5.2 billion. PICC is lined up for as much as 15 billion yuan, also via A-share placement. China Export & Credit Insurance Corp, better known as Sinosure, gets 10 billion yuan. China Taiping Insurance Group picks up 7 billion yuan. China Reinsurance (Group) rounds things out with 3 billion yuan.
Why now, and why this much
