Bank Negara Malaysia told RHB Bank on May 11 that it could proceed with negotiations with Tokio Marine Asia Pte Ltd for a stake sale of up to 100% in RHB Insurance Bhd. The parties have six months from that date to reach an agreement. Signing any definitive deal will also require the Minister of Finance’s approval, with the central bank’s backing, under the Financial Services Act 2013. RHB Bank said it will issue a detailed announcement once a definitive agreement is signed.
The proposed transaction would fold RHB Insurance into Tokio Marine Insurans (Malaysia) Bhd to form a single, combined general insurance entity. RHB Bank would keep up to a 35% stake in the merged company rather than exiting entirely. That minority position would mark a shift in how RHB Bank participates in the general insurance market. CIMB Securities described the change as a move away from an “owning and underwriting” model toward one focused on distribution, where the bank earns fee income by selling insurance products through its branch and digital channels while bearing less underwriting risk.
Funding for the transaction is expected to come from RHB Bank’s internal resources, with no plan to raise capital from shareholders, according to CIMB Securities, as reported by The Edge Malaysia. If the merger goes through, the combined entity would hold a general insurance market share of close to 10% in Malaysia, which would place it among the top four insurers in the country by that measure, according to CIMB Securities analysts.
RHB Bank and Tokio Marine have been here before. In 2018, RHB proposed selling up to 94.7% of RHB Insurance to Tokio Marine Asia, but negotiations broke down without a deal. Analysts say the ground has shifted since then. In August 2025, RHB, Tokio Marine Life, and Syarikat Takaful Malaysia Keluarga Bhd signed an exclusive 20-year bancassurance deal. CIMB Securities pointed to that existing arrangement in its assessment of the current proposal. “Prospects for a concrete deal look to be stronger this time as RHB and Tokio Marine Life, in partnership with Syarikat Takaful Malaysia, successfully worked out an exclusive 20-year bancassurance deal [signed Aug. 1, 2025], benefitting all parties through a unified banca operating model,” the research house said in a note published May 12, as reported by The Edge Malaysia. CIMB Securities added that “merging the GI [general insurance] operations of RHB Insurance and Tokio Marine via an integrated partnership will create a combined market share of close to 10% in Malaysia’s general insurance market.” The research house cautioned that completing the deal still hinges on agreeing on a price and identifying workable merger synergies.
The two sides each have regulatory and financial reasons to pursue the deal. Tokio Marine faces a foreign ownership cap under Malaysian insurance law, which limits foreign shareholders to 70% of a domestic insurer. A transaction structured so that RHB Bank holds a 35% stake in the merged entity would bring Tokio Marine's effective ownership within that threshold, Maybank Investment Bank noted. For RHB Bank, reducing its direct exposure to a capital-intensive underwriting business while retaining a distribution role fits a pattern seen across the region, where banks have moved toward fee-based income from insurance sales rather than carrying the associated balance sheet risk. RHB Bank’s return on equity is also expected to improve as a result.
Maybank Investment Bank put the price of a 100% stake in RHB Insurance at roughly RM1.05 billion, based on a price-to-book value of 1.4 times. Under that estimate, RHB Bank’s outlay to acquire a 35% share of the enlarged entity would come to approximately RM1.03 billion – leaving the bank in roughly the same financial position in terms of capital deployed. A 35% stake in the merged insurer is projected to contribute around RM103 million in annual net profit to RHB Bank, according to Maybank Investment Bank. That figure would represent a 9% rise over RHB Insurance’s standalone net profit in financial year 2025, or a 0.3% addition to RHB Bank’s group earnings. CIMB Securities said the transaction would leave RHB Bank’s capital adequacy ratios broadly unchanged at the bank level. Both CIMB Securities and Maybank IB hold buy ratings on RHB Bank shares, with target prices of RM9.55 and RM9.40, respectively. The stock was trading at RM8.35 as of the afternoon of May 13.
