July 31, 2019 / 11:00 AM / 19 days ago

Malaysia's RHB Bank to hold talks to sell insurance unit to Japan's Tokio Marine

A Malaysian woman is reflected in a glass wall as she walks in front of RHB Bank in Putrajaya February 8, 2007. REUTERS/Bazuki Muhammad/File Photo

KUALA LUMPUR (Reuters) - RHB Bank, Malaysia’s fourth-biggest lender, said on Wednesday it had received permission from the country’s central bank to start talks to sell up to 94.7% of its shares in its general insurance arm to Tokio Marine Asia Pte Ltd.

The announcement comes months after Tokio Marine Holdings Inc, one of Japan’s largest property and casualty insurers by market value, said it would actively pursue here deals overseas to further diversify its geographic footprint.

RHB Bank said a deal is subject to Ministry of Finance and central bank approval.

Reuters reported here in 2016 that Tokio Marine, which already runs its own life and general insurance businesses in Southeast Asia's third-biggest economy, could buy out RHB Insurance for as much as $500 million.

RHB Insurance had total assets of 1.78 billion ringgit ($431.52 million) and liabilities of 1.2 billion ringgit as of last year. It is the 10th largest insurer in Malaysia with a 4.4% market share, according to RHB Bank’s 2018 annual report.

It said the insurance business’s gross written premium - amount customers are required to pay for insurance coverage - rose 14% to 787 million ringgit ($190.79 million) last year, compared with the industry’s growth rate of 1.5%.

Reporting by Krishna N. Das, editing by Louise Heavens

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