Malaysia’s Maybank to Realign Its Insurance and Takaful Businesses

Malaysia Banking Bhd. is proposing to transfer its entire 69.05% stake in Mayban Fortis Holdings Bhd., an insurance joint venture with Fortis Insurance International N.V., to Etiqa International Holdings Sdn. Bhd. for 359 million ringgit (US$111.3 million) with an aim to realign its insurance and takaful businesses.

After the share transaction, Etiqa International will serve as the investment holding company for Maybank's insurance, takaful and asset management operations. The transaction would not cause "any gain or loss" to Maybank group of companies, said Maybank in a statement.

The transaction would assist "Maybank to realign its insurance and takaful business and provide itself flexibility for any potential business expansion," said the publicly listed financial services group. This would also allow Maybank to build on its existing platform internationally, and raise its insurance and takaful business profile.

Mayban Fortis has insurance operations in life and nonlife insurance and family and nonlife takaful businesses in Malaysia. The group posted a net profit of 268 million ringgit, with net assets of 2.28 billion ringgit for the year ended June 30, 2009.

The proposed alignment would strengthen the group's current position as one of the largest and leading takaful companies in the world, said Maybank. "This is also in line with the government's initiative to promote Malaysia as a major hub for international Islamic finance, which also includes takaful business," said the company.

Mayban Fortis was formed in 2001 as Maybank's insurance joint venture with the international unit of European financial services group Fortis [086089], which owns 30% of the venture.

In 2005, Mayban Fortis acquired Malaysia National Insurance Bhd. and its subsidiary Takaful Nasional Sdn. Bhd. The merger of these acquired units led to the re-branding of the group's conventional and takaful businesses to Etiqa in 2007.

Mayban Fortis now operates its conventional and takaful businesses under the brand name of Etiqa. Its subsidiaries operate conventional and takaful insurance, investment-linked business, offshore investment-linked life insurance, fund management and investment holdings, according to Maybank.

(By Iris Lai, Hong Kong bureau manager: [email protected])