AMMB Holdings (AmBank) is considering a sale of its general insurance business as part of a move to exit non-core businesses and focus on its main bank operations, reported Reuters citing three people with knowledge of the development.
AmGeneral Insurance, of which AmBank owns 51% with the rest held by Insurance Australia Group, Australia's biggest general insurer, could be valued at US$400 million to $500 million, the people told Reuters. AmGeneral Insurance is Malaysia’s top auto insurer.
The divestment, if completed, will add to the trend of Asian banks exiting from insurance to free up capital and focus on core banking businesses amid tougher regulatory capital buffer requirements and competition from pure-play insurers.
The plans to sell AmGeneral come months after talks to sell AmBank to bigger local rival RHB Bank fell through. RHB had been in discussions to acquire AmBank in an all-stock deal. AmBank has come under pressure from some of its shareholders to become "leaner" after the calling off of the deal, one of the people said.