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BEIJING (Reuters) – China Life Insurance Co (2628.HK)(601628.SS), the world’s biggest life insurer by market value, is looking to acquire a bank, following its peers as China relaxes restrictions on banks and insurance companies investing in each other.

Deals  |  China

China Life owned a minority stake in Guangdong Development Bank, but wanted to buy a controlling stake in another bank, Chairman Yang Chao said on Friday. The move would mimic its chief rival, Ping An Insurance (601318.SS)(2318.HK), which is also seeking to beef up its banking business.

“We already have a minority stake in a bank, and our next step is to acquire control of another bank,” Yang said on the sidelines of the opening of the National People’s Congress in Beijing.

Owning a bank would help China Life fulfill its ambition of becoming a financial conglomerate and boost revenue through cross-selling of financial products, said Pan Hongwen, analyst at Haitong Securities.

“The challenge is that there are not many suitable targets left, as it’s preferable for China Life to buy one with a national banking license,” Pan said.

But Standard Chartered questioned the wisdom of the move.

“I see no good reason why China Life needs to have controlling interest in a bank,” Standard Chartered said in a note in response to Yang’s remarks, adding that Ping An’s move into banking had yet to add much shareholder value.

THREAT FROM BANKS

Yang said he saw no immediate threat from a parallel move by major Chinese banks into the insurance sector with the easing of government restrictions.

Bank of Communications (BoCom) (3328.HK) (601328.SS) in January launched China’s first bank-controlled life insurer in nearly two decades, while bigger lenders including ICBC (1398.HK) (601398.SS) are planning to enter the insurance business.

“I don’t think our business will be impacted,” Yang said, stressing his company’s dominant position. “The insurance business is built on long-term trust, so I don’t think the competitive landscape will change overnight.”

China Life has said it aims to become a leading financial conglomerate with businesses ranging from insurance, banking, and fund-management to brokerage.

In 2006, it joined with Citigroup Inc (C.N) to buy control of China’s Guangdong Development Bank in a landmark $3.1 billion deal, with China Life holding 20 percent of the Chinese lender.

Ping An, the world’s second-biggest life insurer by market value, already has a banking unit, and is seeking control of Shenzhen Development Bank (000001.SZ). Chairman Ma Mingzhe plans to build Ping An into a financial conglomerate with insurance, banking and asset management as the pillars of its business.