HSBC buys stake in Vietnam insurer

By Nguyen Nhat Lam

HANOI (Reuters) - HSBC Holdings has paid around $254 million (125 million pounds) for 10 percent of Bao Viet to become the sole foreign investor in Vietnam's largest insurance firm, officials from the Vietnamese company said on Thursday.

Vietnam's insurance sector has grown rapidly in recent years, reflecting the country's robust growth of more than 8 percent in 2005 and 2006.

Bao Viet Chairman Le Quang Binh said a further 3.56 percent stake had been sold to state-run shipbuilder Vinashin for "about $90 million".

Bao Viet's share prices in the two deals averaged about 71,900 dong (2.2 pounds), company officials said. Dealers said that shares in the unlisted group are being traded at about 65,000 dong ($4.0) each on the unofficial markets.

"HSBC Insurance with its vast experience and staunch commitment to help Bao Viet will elevate Bao Viet to a global level," Binh told a signing ceremony in Hanoi.

The deal between HSBC and Bao Viet, formally known as the Vietnam Insurance Corporation, was advised on by Credit Suisse.

Bao Viet's new registered capital would be 5.73 trillion dong (174 million pounds), Binh said.

"Bao Viet should have plans to list on the stock market in Vietnam and markets overseas as well," Finance Minister Vu Van Ninh said in a speech at the ceremony.