Malayan Banking (Maybank), Malaysia's biggest bank, is preparing to spin off and list its Etiqa insurance arm on the local stock exchange, reports Reuters citing sources with knowledge of the matter.
As part of the arrangement, 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.
Etiqa, which operates in Malaysia, Singapore, the Philippines and Indonesia, is estimated to be worth at least US$1 billion, two sources said. It would have a bigger market value than insurance peer Syarikat Takaful Malaysia, which is valued at about $700 million.
Maybank's insurance business is called Etiqa International Holdings. It owns 69% of Maybank Ageas Holdings while Ageas, the Brussels-based international insurer, holds the remainder. Maybank Ageas owns various Etiqa units.
However, the exact structure of the listing had not been finalised and the terms could change.
Maybank, Etiqa and Ageas are working with investment banks on the spin off, said the sources, who declined to be identified as news of the listing is not public.
Etiqa, which provides life and general insurance as well as family and general takaful, or Islamic insurance, products, reported record revenue of MYR6.2 billion ($1.6 billion) in 2017. Profit before tax rose by 18.5% to MYR1 billion last year.
In March, Etiqa said it maintained its top position in Malaysia's general insurance and general takaful segment with an 11.8% market share. It was ranked fourth in the life and family segment, with an 8.9% market share.