Saturday, 6 May 2017

(The Star) BIMB mulls sale of stake in Syarikat Takaful

Lender has reached out to banks to advise on its 60% holding

KUALA LUMPUR: BIMB Holdings Bhd, the parent of Malaysia’s oldest Islamic bank, is considering a sale of a stake in its listed insurance unit amid a strategic review of its businesses, according to people with knowledge of the matter.

The lender has reached out to banks to advise on its 60% holding in Syarikat Takaful Malaysia Bhd, which has a market value of about RM3.27bil (US$755mil), said the people, who asked not to be identified because the process is private.

The Kuala Lumpur-based company could pick an adviser as soon as this month, the people said.

Proceeds from any disposal would help BIMB strengthen its balance sheet and comply with new capital-adequacy rules for financial holding companies in Malaysia, said one of the people.

Any deal would add to the US$11.5bil of announced mergers and acquisitions involving companies based in Malaysia over the past 12 months, according to data compiled by Bloomberg.

Deliberations on a sale are at an early stage and there is no certainty a transaction will take place, the people said.

A spokeswoman for BIMB declined to comment, while a representative for Syarikat Takaful didn’t immediately respond to requests for comment.

Bank Negara is reviewing caps on foreign ownership of insurers as it seeks to boost local participation in the industry, people familiar with the matter said last month.

Strict application of existing policy would require overseas firms owning 100% of local insurers to cut their stakes to no more than 70%.

Foreign companies, including Sumitomo Life Insurance Co and FWD Group, have recently been drawn to South-East Asian insurance as a way to capitalise on rising incomes in the region.

FWD is among foreign bidders for the life insurance operations of Thailand’s Siam Commercial Bank Pcl, people familiar with the matter said earlier.

BIMB controls Bank Islam Malaysia Bhd and BIMB Securities Sdn Bhd, in addition to Syarikat Takaful, its website shows. – Bloomberg