SCB Life Assurance stake sold in deal worth B92.7bn

Siam Commercial Bank (SCB) will gradually realise income over 15 years from selling the majority stake in subsidiary SCB Life Assurance, plus a 15-year bancassurance agreement, worth 92.7 billion baht, its chief says.

The bank sold SCB Life Assurance at 2.4 times the subsidiary book value, well above the average of one time of other insurance firms, said chief executive Arthid Nanthawithaya at the bank’s shareholder meeting yesterday.

Under the share sale agreement with FWD Group Financial Services, the bank will receive other returns, including a distribution fee, commission and allowance, and investment returns, he said.

The bank cannot disclose details of SCB Life’s book value and the share sale price as it is awaiting approval from regulators, including the Bank of Thailand and the Office of Insurance Commission.

The bank’s shareholders approved the deals yesterday.

SCB, the country’s largest bank by assets, entered into a binding agreement to sell 99.2% of SCB Life to insurer FWD Group Financial Services, marking Southeast Asia’s biggest life insurance acquisition.

After the share sale is completed, the bank and the Hong Kong-based insurance firm, owned by a son of tycoon Li Ka-shing, will enter into the 15-year bancassurance agreement, enabling FWD to sell life insurance products through SCB.

SCB holds about 66 million shares in SCB Life, which has millions of policyholders and contributes 6 billion baht a year on average to the bank.

Mr Arthid said the bank does not plan to lay off SCB Life staff in the first year after the deal is completed.

FWD will also buy SCB Life shares from minor shareholders.

FWD operates in Thailand, Hong Kong, Macau, Vietnam, Philippines, Malaysia, Singapore, Indonesia and Japan.