HSBC Holdings Plc said on June 7 it planned to establish an insurance company in mainland China before year-end, seeking a fresh revenue source in the rapidly growing economy.

Peter Wong, executive director of Hongkong and Shanghai Banking Corp, HSBC's Asian unit, said the London-based lender was looking for a partner. He did not specify what form of insurance HSBC would enter.

"We plan to set up an insurance company and we are seeking partners," Wong told Reuters on the sidelines of a banking conference, adding that he expected the new company could be founded by the end of 2006.

Bank of Communications Co Ltd president Zhang Jianguo told Reuters in March that his bank the nation's fifth-largest lender, was planning to set up its own insurance company in China, but he declined to give a timeframe. HSBC bought 19.9% of Bank of Communications in 2004.

Asked if Bank of Communications might partner HSBC in the insurance business, Wong replied: "I understand that BoComms hasn't been allowed to do life insurance business now, and we will have different ways at the beginning."

The British bank opened a Shanghai-based asset-management joint venture this year, which has raised nearly US$370 million (RM1.35 billion) for its first fund, launched in April. It is also keen to expand in China's brokerage business.

"We are in talks with more than three Chinese securities companies, but we also realise Chinese regulators have halted approval for new securities ventures recently," said Wong. He declined to name the companies.

Wong said his bank so far had no preference among the possible securities industry partners, and that HSBC would work with Bank of Communications on the issue, which might eventually lead to the creation of a new joint venture securities house.

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