Malayan Banking (Maybank) is looking to list its insurance arm, which when completed will see the largest listed insurance business in terms of market capitalisation.
The bank’s investment banking arm, Maybank Investment Bank, and Credit Suisse are said to be working on the deal, reported The Star. A Maybank spokesperson when contacted said the bank does not comment on market speculation.
Maybank’s insurance business is conducted by Etiqa International Holdings, which owns 69.05% of Maybank Ageas Holdings. The latter in turn wholly owns six insurance subsidiaries, including Etiqa Insurance Bhd, Etiqa Takaful and Etiqa Insurance Pte Ltd.
The Etiqa group offers life and general insurance in Malaysia, Singapore and the Philippines.
While the insurance business is relatively small within the Maybank group, Etiqa is the largest insurance company in Malaysia. But its presence is largely in Malaysia for now.
According to sources, Etiqa plans to be a major regional player using Maybank’s extensive network of branches in Asean. Its Singapore business unit has been working with the bank there and has been able to grow the insurance business there in the past three years.
Even in Malaysia, there are opportunities to expand, given that insurance penetration is still low.
Currently, the current biggest listed insurance company on Bursa Malaysia is Syarikat Takaful Malaysia, majority-owned by Lembaga Tabung Haji and which has a market capitalisation of over MYR3 billion (US$682 million).
For the financial year ended 31 December 2016, Maybank Ageas made a record pre-tax profit of MYR810.3 million, an increase of more than a third from the MYR604.4 million posted for 2015.
Its total assets stand at MYR31.9 billion, while total combined gross premium and contribution was MYR5.3 billion, investment income was MYR1.1 billion and gross benefits and claims payout at MYR4 billion.
Etiqa Takaful commands a market share of 49% in general takaful and 16.3% in family takaful new business. Its bancassurance channel, meanwhile, has a market share of 18% in regular premium sales, while its online business has a 89.7% market share in general insurance and general takaful online sales, the company said in a March statement.