The Bank of China (BOC) said Friday it would not bid for the Asian insurance unit of American International Group Inc. (AIG), since doing so would not conform to the bank's strategy.
BOC would stick to commercial banking as its core business, BOC Chairman Xiao Gang told Xinhua.
The other concern is that the losses of U.S. and European financial institutions have not bottomed out, Xiao said.
In February, an unidentified official of the bank said it had not made a bid for U.S. insurer AIG's Asian life-assurance unit when asked about a Financial Times report, which said BOC had been chosen by the Chinese government as a potential bidder for the division.
China Life Insurance Company Ltd. (China Life) took a similar stance Tuesday, saying it would not bid for AIG's Asian life insurance unit -- the American International Assurance Company Ltd. (AIA).
The United States said Monday it would provide another 30 billion U.S. dollars to AIG to stave off meltdown.
AIG, once the world's largest insurer, lost 61.7 billion U.S. dollars in the fourth quarter of 2008, the biggest quarterly loss in U.S. history. The insurer posted a net loss of 99.3 billion U.S. dollars last year.
On the issue of cooperation with foreign investors, Xiao said Singapore's state-run investment agency Temasek Holdings, one of BOC's foreign investors, promised not to sell out its 4.13 percent stake in BOC in the first half of this year.
In 2005, four foreign investors bought a 13.91 percent stake in BOC. The deal involved Royal Bank of Scotland (RBS), Singapore's Temasek Holdings, Swiss investment bank UBS and the Asian Development Bank.
However, the financial crisis pushed RBS to sell its 2.37 billion U.S. dollars stake in BOC on Jan. 13, two weeks after UBS divested all its shares.
Xiao said their move aimed at easing their financing difficulty and didn't affect BOC's businesses and financial situation.
He added BOC will continue cooperation with RBS on human resources management and credit cards, saying "BOC will strengthen cooperation with foreign banks and learn experiences from them on product innovation and risk management."
(Xinhua News Agency March 6, 2009)
