PNB hikes stake in insurance arm

Philippine National Bank (PNB) is further raising its interest in Allied Bankers Insurance Corp. (ABIC) as part of the consolidation of its non-life insurance businesses through a share-swap agreement.

PNB said the board of directors of PNB Holdings Corp. approved the exchange of 3.13 million common shares in PNB General Insurers Co. Inc. (PNB Gen) for 93.2 million common shares in ABIC.

Last April, the wholly owned subsidiary of the bank owned by tobacco and airline magnate Lucio Tan approved the swap of six million PNB Gen shares to 178.89 million ABIC shares to raise its stake to 22.7 percent from four percent.

Upon completion of the foregoing and the previously approved exchange, PNB said the stake of PNB Holdings in ABIC would reach 33.1 percent.

The consolidation is in line with the objective of PNB to synergize and combine the business operations of PNB Gen and ABIC.

The country’s fifth largest bank said the transaction is subject to necessary regulatory approvals. PNB Holdings is the vehicle used by the bank to engage into 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 inched up 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 Co. 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.