Maybank’s hidden value

THE sterling set of results announced by Etiqa Group Insurance & Takaful recently makes it candidate for a corporate exercise.

The Islamic insurance arm that is owned by Malayan Banking Bhd, registered a profit before tax of RM1.01bil on a gross premium contribution of RM6.2bil in 2017. The margin of almost 20% makes it stronger than the existing listed Islamic insurer such as Syarikat Takaful Malaysia Bhd.

Syarikat Takaful, which has a market capitalisation of RM2.7bil, registered a net profit of RM206.7mil on a turnover of RM2.14bil last year.

Interestingly, Etiqa is not the only insurance company under the stable of Permodalan Nasional Bhd (PNB), the major shareholder of Maybank.

There is another Islamic insurance company, Takaful Iklas, which is under MNRB Holdings Bhd, another company under PNB. According to MNRB’s quarterly results, its takaful business generated RM32mil in profit against a gross premium of RM763mil for the nine months until December 2017.

The result clearly shows Etiqa in a leading position when it comes to Islamic insurance. Etiqa’s thriving business is probably due to it being part of the Maybank group that provides the insurance company with a captive market. Nevertheless, its value is hidden in the current structure as part of the larger Maybank group.

A listing of Etiqa could possible give rise to a vehicle with a market capitalisation of more than RM15bil, considering the value Syarikat Takaful commands in the market.

Better still, if Etiqa takes over Takaful Iklas from MNRB or the entire listing status of the latter. It would be well positioned as a commendable local insurance company and one that offers opportunities for Islamic funds to put their money.

It has been speculated in the past that Etiqa could possibly be listed as a separate entity. Perhaps it is something that would happen since PNB has seen several corporate moves under the leadership of Tan Sri Abdul Wahid Omar.