THURSDAY, March 28, 2024
nationthailand

SCB Life enters partnership with FWD via Bt92.7 bn share sale 

SCB Life enters partnership with FWD via Bt92.7 bn share sale 

 Siam Commercial Bank Plc (SCB) has sold 99.2 per cent of its holding in SCB Life Assurance Plc for Bt92.7 billion to FWD Group Financial Services Plc (FWD), in a move to raise investment capital. The bank's life insurance business generated an average of Bt6 billion in profits in recent years. 


The segment is still doing well in Thailand but customer growth has been declining in the past three years, said SCB President Arak Sutivong.
SCB will now continue its life insurance business through a long-term partnership with FWD, said Chief Executive Officer Arthid Nanthawithaya at press conference today (July1). SCB has signed an agreement on the sale. 
Following the transcation, Capital Yuan Tao expects SCB to pay a special dividend this year, between Bt16 to a maximum of 27 baht per share.
KTB Securities predicts the bank to post Bt42 billion in annual net profit after tax, representing a surge of 105 per cent. 
Meanwhile, SCB has informed the Stock Exchange of Thailand this morning that it had signed a binding Share Sale Agreement with FWD - the largest life insurance transaction in Southeast Asia in terms of value.
"The process will be completed by the end of this year, including the approval of the transaction by regulators and the Bank of Thailand and other stakeholders," Arthid stated.
Under the arrangement, SCB will distribute FWD's life insurance products to FWD's customers in Thailand for a period of 15 years.
SCB Life's customers will not be affected by the transfer of ownership to FWD and will continue to receive protections, benefits and customer services in accordance with the terms of their policies, which will be upheld by FWD after the closure of the transaction, said Ronald Arculli, chairman of the board of FWD Group, at the press conference.
"The bancassurance business remains our long-term strategic priority. The establishment of this partnership with FWD will help create significant long-term value for our customers, shareholders, employees, and other key stakeholders," Arthid said.
Currently, SCB Life has about two million policy holders, to be transferred to FWD after the transaction process.
Established in Asia in 2013, FWD is the insurance arm of Pacific Century Group. The firm entered the local market in February 2013 through the acquisition of ING.
It has 2.2 million customers in Thailand, said Huynh Thanh Phong, the company's chief executive officer. 
"Southeast Asia is the future of growth in the life insurance business. Our financial commitment of Bt92.7 billion is a symbol of our commitment in Thailand and the rest of the region," he stated.
SCB's share price rose to Bt145.50 at mid-day before close Bt141 per share or up Bt1.50 per share or 1.08 per cent from Friday's close with trade value Bt6.99 billion on Monday.

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