In light of the recent fluctuations in the domestic and international capital markets, Ping An Insurance Group Company of China noted the speculation in the market over the reasons for the drop in the share price of the company. With regard to the market speculation, the company announced that it is in solid position in terms of capital liquidity and adequacy.
As at June 30, 2008, the audited net asset value of the company prepared under PRC Accounting Standards and International Accounting Standards was RMB83.38 billion and RMB90.42 billion, respectively. These values have reflected the losses from the fluctuation in the market value of the company’s investment in Fortis which amounted to RMB10.52 billion in fair value.
Based on future international capital market conditions and the movements in the share price of Fortis, the company will decide prudently whether to make impairment provisions on the investment in Fortis in the 2008 third quarterly results of the company. If the impairment provisions are made, the accumulative losses embedded in the company’s net assets would be reflected in the profit and loss statement.
Ping An emphasized that it is in a strong and solid position in terms of capital adequacy and liquidity, underpinned by stable fundamentals and prudent principles, regardless of whether or not such impairment provisions on the investment in Fortis will be recognized in the 2008 third quarterly results. All core businesses including insurance, banking, trust and securities business, have achieved healthy and reasonable growth, the company said.