China Life forecasts 60% profit drop, issues warning

Added 18th October 2016

China Life, the country’s largest insurer by market cap, has issued a profit warning after it forecast a 60% drop in net profit due to a decrease in investment income for the nine months to 30 September 2016.

China Life forecasts 60% profit drop, issues warning

In a statement on the Hong Kong stock exchange on Tuesday, China Life wrote: “The decrease is mainly attributable to the decrease in investment income and the impact of the update of discount rate assumption of reserves of traditional insurance contracts.”

Net profit for the nine-month period ending 30 September 2015 was RMB33.8bn (£4.1bn, $5bn, €4.6bn), meaning a 60% decrease would mean net profit attributable to equity holders of RMB13.5bn for the same period this year.

China Life added, however, that the results are preliminary and unaudited and could therefore be subject to change.

Headquartered in Beijing, China Life is the country’s largest state-owned financial and insurance company. The group consists of various subsidiaries, including China Life Insurance, China Life Asset Management, China Life Pension Company, and China Life Insurance (Overseas) Company.

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