Bank Negara Malaysia (BNM) has given the go signal for negotiations between RHB Bank and Tokio Marine Asia, over the sale of the former’s general insurance business.
The central bank said on July 31 that “it has no objection for the company to commence negotiations with Tokio Marine in relation to the proposed disposal of up to 94.7% of its equity interest in RHB Insurance,” The Star reported.
The approval is valid for six months beginning July 29, the date of BNM’s letter.
The letter added that both parties must obtain approval from Malaysia’s Minister of Finance, with the recommendation of BNM, before entering any definitive agreement.
Read more: Tokio Marine looking to buy RHB Bank’s general insurance business
RHB Bank said it would make a more detailed announcement regarding the sale, once a deal has been signed.
Meanwhile, Reuters estimated the deal could go for as high as US$500 million. The buyer, Tokio Marine, already has existing life and general insurance operations in Malaysia.
RHB Insurance had total assets of MYR1.78 billion (US$431.52 million), while its gross written premiums increased by 14% to MYR787 million (US$190.8 million), according to its 2018 annual report.
