HSBC Holdings has announced that its Asia Pacific insurance unit has secured the Bank Negara Malaysia’s approval to divest 49% stake in Malaysian life insurance joint venture (JV) to Hong Kong-based insurer FWD Group.
HSBC secures regulatory approval to offload 49% stake in Malaysian insurance business to FWD. Photo: courtesy of Cheqbo/Wikipedia.org.
HSBC Holdings has announced that its Asia Pacific insurance unit has secured the Bank Negara Malaysia’s approval to divest 49% stake in Malaysian life insurance joint venture (JV) to Hong Kong-based insurer FWD Group.
Pursuant to terms of the deal, the UK-based bank will divest its stake in HSBC Amanah Takaful Malaysia Bhd to FWD Life Insurance Company, a subsidiary of FWD.
Financial terms of the transaction, which is likely to conclude by June next year, have not been disclosed.
Malaysia’s JAB Capital and the Employees Provident Fund Board of Malaysia own a 31% and 20% stake, respectively, in the Amanah Takaful unit.
HSBC Malaysia unit chief Stuart Milne told Reuters: “We have decided to exit the takaful manufacturing business and focus on our banking operations in Malaysia.
He further said that the bank will continue to distribute insurance products in that market.
Takaful insurance products have to comply with Islamic Sharia laws, whereby the companies to follow the religious guidelines such as not to invest in gambling and alcohol industries.
For FWD Group, the deal will further bolster its presence in Asian markets where the company has already operations in Singapore, Hong Kong, Macau, Thailand, Indonesia, and Japan.
FWD has over $26.6bn in assets. It offers wide range of products such as life and medical insurance, and general insurance.