Ping An in £1.7bn Fortis deal

HSBC'S Chinese insurance partner Ping An has agreed to buy half of Fortis's asset-management unit for €2.15 billion (£1.68 billion).

Fortis is eager to restore its balance sheet after €1.8 billion in asset writedowns. Ping An won shareholder approval this month to raise about $14 billion (£6.99 billion) selling stock and bonds and plans to use the proceeds to expand outside China.

The Dutch-Belgian bank will rename the asset management unit Fortis Ping An Investments. Fortis boosted its money-management operations with the €24 billion purchase of ABN Amro in the Royal Bank of Scotland-led deal last year. HSBC has almost 20% in Ping An, which bought 4.2% of Fortis for €1.81 billion in November, and now owns 4.99% of the company.

Fortis will fully indemnify Ping An against "any impairment" on the asset management unit's collateralised debt and loan obligations, which amount to about €23 million. Fortis Investments, the global asset-management arm of Fortis, manages €133 billion. Net profits at the unit rose 15% to €102 million last year.

The company is the latest to turn to sovereign wealth funds, foreign companies and public investors, which have invested more than $100 billion in US and European companies to shore up capital eroded by losses on mortgage-related securities. China, through its $200 billion wealth fund and companies that raised $126 billion in stock sales last year, has been one of the biggest investors.