Affin gets BNM's nod to boost stake in AXA Affin General Insurance

Affin Bank's branch in Seri Petaling, Kuala Lumpur. Affin Bank Bhd is 100% owned by Affin Holdings Bhd. (Photo taken by Hafidz Mahpar for Star Online)

KUALA LUMPUR: Affin Holdings Bhd has received Bank Negara Malaysia’s (BNM) nod to acquire 7.07% equity interest in AXA Affin General Insurance Bhd (AAGI) from Felda Marketing Services Sdn Bhd to RM99.09mil.

The financial services group told Bursa Malaysia on Monday that the proposed acquisition would boost the equity interest in AAGI held by Affin or its commercial banking unit Affin Bank Bhd from 37.07% to 44.14%.

Affin had in March last year received Bank Negara’s go-ahead to start negotiations with Felda Marketing Services, AXA Asia and subsequently the minority shareholders to acquire additional AAGI shares.

In February, BNM informed Affin that it had no objection for an extension of six months up to Aug 5 for Affin to complete its negotiations with Felda Marketing Services and AXA Asia in relation to the proposed deal.

Last month it said it was seeking BNM’s approval to acquire 7.07% equity interest in AXA Affin General Insurance Bhd (AAGI) from Felda Marketing Services for RM99.09mil in cash. 

For the financial year ended Dec 31, 2016, AAGI recorded a profit before tax of RM181.2mil, higher than the previous year’s RM114.8mil.

According to Affin’s annual report, this increase was mainly due to higher underwriting results and higher investment income from gain on sale of investment.

AAGI closed 2016 with a gross written premium of RM1.47bil, recording a 10.5% growth of RM140mil from RM1.33bil previously.

The motor insurance segment was the largest contributor with 52.5% of the total business.