HSBC Holdings Plc, the largest European bank by market value, announced plans on Wednesday to sell its 15.57 percent stake in China's Ping An Insurance (Group) Co to a Thai conglomerate.

The sale will mark the end of a decade-long investment for the lender, which said it is taking the step to raise capital and boost its returns.

The announcement follows the bank's decision last year to dispose of non-strategic assets, thus giving itself more leeway to explore the banking business on the Chinese mainland, analysts said.

Charoen Pokphand Group Co Ltd, owned by the Thai tycoon Dhanin Chearavanont, will pay $9.39 billion, or about HK$59 ($7.60) a share, for HSBC's stake in China's second-biggest insurer by market value, HSBC said in a statement.

That was a 2.3 percent premium over Ping An's closing price on Tuesday in Hong Kong trading.

The announcement said the transaction will be conducted in two stages. The first will see 20.8 percent of HSBC's share in Ping An sold by Friday, and the second will see the remainder sold during the nine business days following the China Insurance Regulatory Commission's approval of the deal.

The purchase will be financed in part with cash and in part with assistance from the China Development Bank Corp's Hong Kong branch.

In China, Charoen Pokphand Group has invested in agriculture, retail, automotive, IT and a variety of other sectors. The company's website says it operates the Lotus chain of supermarkets in Shanghai.

Stressing the importance of the Chinese market, Stuart Gulliver, HSBC chief executive officer, said the deal comes as a further step toward the company's goal of delivering long-term value to its shareholders.

Linus Yip Sheung-chi, a Hong Kong-based analyst with First Shanghai Securities Ltd, said he thinks HSBC is right to be planning to dispose of a non-strategic asset.

"Technically, insurance is not part of a bank's core business," he said.

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