PNB consolidates non-life insurance business
Listed Philippine National Bank (PNB) is consolidating its non-life insurance businesses through a share-swap agreement.
In a disclosure to the Philippine Stock Exchange (PSE), PNB said its board of directors approved the exchange of six million common shares of PNB General Insurers Co. Inc. (PNB Gen) for 178.89 million common shares of Allied Bankers Insurance Corp. (ABIC).
Upon completion of the transaction, PNB’s stake in ABIC would increase to 22.7 percent from the current four percent.
“We further advise the PSE that the transaction is in line with the objective to synergize and combine the business operations of PNB Gen and ABIC,” PNB said.
The country’s fifth largest bank said the transaction is subject to necessary regulatory approvals. PNB’s whollyowned PNB Holdings Corp. is the vehicle used by the bank to engage in the insurance business.
PNB Holdings has a 34.25 percent stake in PNB Gen – a non-life insurance company that offers coverage for fire and allied perils, marine, motor car, aviation, surety, engineering, accident insurance and other specialized lines.
Total assets of PNB Gen reached P7.6 billion with a total net worth of P915.9 million last year. Its net income went up by 4.5 percent to P69.5 million last year from P66.5 million in 2016.
PNB Gen’s paid-up capital reached P912.6 million, one of the highest in the industry, from an initial paid-up capital of P13 million when it started operations.
Its capital management framework is aligned with the statutory requirements imposed by the Insurance Commission (IC).
Under the requirements of the IC and the Insurance Code, PNB Gen should meet the minimum levels of minimum statutory net worth of P900 million by Dec. 31, 2019 and P1.3 billion by Dec. 31, 2022.
ABIC, formerly the Sincere Insurance Company Inc. was incorporated in 1960 and was acquired by the Lucio Tan Group of Companies in 1980.
In December 2015, PNB entered into an agreement selling its 51 percent stake in PNB Life Insurance Inc. to Allianz SE and the partnership was sealed with the establishment of Allianz PNB Life Insurance Inc.
PNB hopes to book a 13 to 14 percent growth in net income this year as it tries to sustain the strong growth of its core lending and deposit businesses.
PNB registered a 14 percent growth in earnings to P8.2 billion last year from P7.2 billion in 2016. It raised P3.9 billion from the sale of foreclosed assets last year, higher than the P2.5 billion recorded in 2016.
The bank’s loan book rose by 17 percent to P502.1 billion, while its deposit base went up by 12 percent to P637.9 billion.
PNB has a total of 692 branches and 1,243 ATMs nationwide. It also has the most extensive international footprint with 72 overseas branches, representative offices, remittance centers and subsidiaries across Asia, Europe, the Middle East, and North America. –