Takaful Malaysia For Sales

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 percent holding in Syarikat Takaful Malaysia Bhd - which has a market value of about $755 million, 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 $11.5 billion of announced mergers and acquisitions involving companies based in Malaysia over the past 12 months. Deliberations on a sale are at an early stage and there is no certainty a transaction will take place, the people said.
     
Malaysia’s central bank 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 percent of local insurers to cut their stakes to no more than 70 percent.

Foreign companies, including Sumitomo Life Insurance Co. and FWD Group, have recently been drawn to Southeast Asian insurance as a way to capitalize 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.