Ping An Acquires HKD 180 Billion in Bank H-Shares Over Six Months

Ping An Insurance, along with other mainland insurers, has significantly increased its holdings in major domestic banks, placing confidence in high dividend yields to counterbalance narrowing margins and mounting profitability pressure within the banking sector. As of June 24, Bloomberg data shows Ping An has accumulated HKD 180 billion (USD 23 billion) in Hong Kong-listed bank stocks since the end of 2024, pushing its stake in ICBC H-shares to 18%, and surpassing 15% in both China Merchants Bank and Agricultural Bank of China.

The appeal of Hong Kong-listed bank stocks lies in their low valuations and high dividend yields, offering insurance capital a more attractive asset allocation amid rising demand for yield. Supported by these inflows, the China Bank Index has surged to a seven-year high, with CITIC Bank hitting an all-time high and Agricultural Bank of China closing Tuesday at its highest level since its 2010 IPO.

The average dividend yield of large Chinese banks listed in Hong Kong exceeds 4%, while the 10-year government bond yield stands at 1.65%. According to Yang Bo, Chief Investment Officer at Shenzhen Qianhai Kaiyuan Fund, historically low valuations and high dividend payouts make bank shares a logical choice for long-term investors seeking income or defensive positioning. Ping An highlighted that the sector’s low volatility and high dividends are expected to provide solid spread income, and reaffirmed its commitment to a balanced strategy between growth and high-dividend value stocks, while diversifying into non-bank equities.

Other insurers have also joined the buying wave. In March, Ruihua Insurance increased its stake in CITIC Bank’s Hong Kong-listed shares from 4.98% to 5%, and in January, New China Life acquired a 5.45% stake in Bank of Hangzhou from Commonwealth Bank of Australia. While the sector continues to rally, Yang Bo warned that fundamentals remain under pressure from low profitability and high funding costs, and that the sustainability of this uptrend will depend on whether credit expansion leads to real economic activity.