August 19, 2018

Maybank to spin off, list Etiqa

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Malayan Banking Bhd (Maybank) is preparing to spin off and list its Etiqa insurance arm on the local stock exchange.

Etiqa, which has operations in Malaysia, Singapore, the Philippines and Indonesia, is estimated to be worth at least USD1 billion, according to two sources. It would have a bigger market value than insurance peer Syarikat Takaful Malaysia Bhd, which is valued at about USD700 million.

As part of the transaction, Maybank’s investors are expected to receive shares in the insurance company in proportion to their existing holding in the bank, the sources said, adding that no new money is expected to be raised in the listing.

However they said the exact structure of the listing had not been finalised and the terms could change.

Jolynn Kek, investment manager at Aberdeen Asset Management Sdn Bhd, who holds shares in Maybank, said the listing would bring new attention to the insurance sector.

“There isn’t much liquidity among existing listed insurers. The Etiqa franchise is quite strong, so it’s definitely a big attraction especially with Maybank as a bancassurance partner,” she said.

“If the stake is fully spun off, it would be an advantage to Maybank as it can reduce the capital requirements.”

The planned listing comes as Malaysian state-linked fund management firm Permodalan Nasional Bhd, the biggest shareholder in Maybank, is seeking to restructure its holding companies in order to boost returns, according to a Nasdaq report.

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