RHB Bank aims to complete insurance arm disposal by 1Q20

KUALA LUMPUR: RHB Bank Bhd hopes to complete the proposed disposal of its insurance arm to Tokio Marine Asia Pte Ltd by the end of the first quarter next year ( 1Q 2020).

Group managing director Datuk Khairusalleh Ramli said the bank plans to submit its proposal to Bank Negara Malaysia (BNM) by November.

“We have started our discussions with Tokio Marine and they have started their due diligence on RHB Insurance Bhd.

“Hopefully, from what we have so far based on the discussions, we can come out with something that we can put forward to both BNM as well as the Ministry of Finance for their approvals,” he told a press conference after announcing RHB’s 2Q19 financial results here, yesterday.

On July 31, RHB obtained the central bank’s approval to commence negotiations with Tokio Marine on the proposed disposal of 94.7 per cent of its equity interest in RHB Insurance.

The approval is valid for six months from the date of BNM’s letter, dated July 29.

Khairusalleh said RHB Insurance only contributed around RM70 million to the group’s pre-tax profit of RM1.66 billion achieved during the first half of this year.

On another note, he said RHB’s loan growth is expected to increase by five per cent this year, slightly lower than 5.5 per cent recorded last year due to the anticipation of a slower industry growth.

He said the main contributors to the loan growth would be the mortgage and small and medium enterprise segments, as well as its Singapore business.

RHB recorded a higher net profit of RM615.41 million in the second quarter ended June 30, 2019 against RM570.26 million in 2Q18, thanks to higher nonfund based income and lower expected credit losses on loans.

Revenue rose to RM3.42 billion during the quarter under review from RM3.05 billion previously. — Bernama