Thailand's Siam Commercial Bank seeks bids for insurance business-sources

Krung Thai Bank PCL

23/01/2017 10:08

By Anshuman Daga and Saeed Azhar 
    SINGAPORE, Jan 23 (Reuters) - Siam Commercial Bank Pcl (SCB) 
 SCB.BK  has begun to formally seek bids for its life insurance 
business in a sale that could raise about $3 billion for 
Thailand's third-biggest lender, said people with knowledge of 
the process. 
    Prudential PLC  PRU.L , AIA Group  1299.HK > and Manulife 
Financial Corp  MFC.TO  are among insurers weighing a bid for 
SCB Life Assurance, the people said. 
    SCB was looking to sell a 49 percent stake in the unit last 
year, but the process was delayed due to expected changes in 
foreign shareholder rules governing the sector, according to 
separate sources aware of the process.  
    SCB was looking to sell the unit last year, but the process 
got delayed due to expected changes in foreign shareholder rules 
governing the sector, said separate sources aware of the 
process. 
    Whether it sells all or only part of the business depends on 
the offers it receives and who they are from, the people said. 
First round bids are expected to be submitted by early February, 
they added. 
    Thailand caps foreign companies' stakes in domestic 
insurance ventures at 49 percent, but may permit higher holdings 
on a case-by-case basis. 
    The deal is expected to include the rights to sell insurance 
products through SCB's 1,200 branch network. The so-called 
bancassurance model is lucrative for banks as global insurers 
are keen to pay hefty fees for access to lenders' branch 
networks and for exposure to a rapidly growing middle class in 
developing markets, such as Thailand. 
    SCB Life is ranked fourth in Thailand's life insurance 
market, with Muang Thai Life Assurance Public Co as the market 
leader. 
    Other major players are AIA, France's AXA  AXAF.PA , which 
has a deal with Krung Thai Bank  KTB.BK , and Thai Life 
Insurance. 
    Southeast Asia is seen as a growth region for foreign 
insurers, who are attracted by relatively faster growth rates of 
life premiums and the region's low insurance penetration. 
    The sources for this story declined to be identified as they 
were not authorised to speak to the media. 
    SCB's Chief Executive Officer Arthid Nanthawithaya declined 
to comment. Prudential, AIA and Manulife declined comment. 
 
 (Additional reporting by Manunphattr Dhanananphorn in BANGKOK; 
Editing by Martin Howell in SINGAPORE) 
 ((anshuman.daga@tr.com; +65 64035676; Reuters Messaging: 
anshuman.daga.thomsonreuters.com@reuters.net)) 
 
Keywords: SIAM COMRCL INSURANCE/