PETALING JAYA: Market pundits are divided about Malayan Banking Bhd
’s (Maybank) plan to take full control of its insurance and takaful arm, Etiqa.
AmInvestment Bank Research (AmInvest Research) voiced its concerns on the RM4.83bil deal’s frothy valuation and near-term capital drag.
Kenanga Research, which is “neutral” on the deal, said the acquisition “takes the gloss off slightly” from Maybank’s dividend appeal.
Meanwhile, Hong Leong Investment Bank Research calls the deal a “tactically positive” move.
It noted that the acquisition provides Maybank with greater control over a strategically important insurance franchise, while improving capital fungibility across the group.
On Aug 3, Maybank announced it was acquiring Ageas Insurance International’s 30.95% stake in Maybank Ageas Holdings Bhd, which holds the Etiqa businesses in Malaysia and Singapore.
Maybank already holds a 69.05% stake in Maybank Ageas. The acquisition is subject to Bank Negara Malaysia’s approval and targeted for completion in the late third quarter of financial year 2026 (3Q26).
Etiqa offers a comprehensive suite of life and general insurance, as well as family and general takaful products, distributed through multiple channels.
RHB Research said the deal is expected to be mildly accretive to Maybank’s earnings and return on equity, but would consume approximately 43 basis points in Common Equity Tier 1 capital at the bank level.
“While headline optics of the deal could raise questions, we believe this may form part of Maybank’s bigger plan to improve capital efficiency and extract higher returns from its subsidiaries.”
RHB Research said the RM4.83bil purchase price reflects an acquisition price-to-book value (P/BV) multiple of 1.98 times and a price-to-earnings multiple of 15.3 times.
While within, albeit at the upper end of, deal multiples in the region, such pricing may have been required to get the deal done, given Maybank’s extensive distribution network,” it added.
AmInvest Research acknowledges the merits of acquiring the 31% stake in Maybank Ageas.
However, the research house pointed out that many of the strategic initiatives outlined by Maybank could arguably be pursued under the existing 69% ownership, making full control a “nice to have”, rather than a necessity.
“That said, it does offer greater operational flexibility, simplifies decision- making, and also opens a cleaner pathway to a potential Etiqa listing, should management opt for one over the medium term,” the research house said.
Quoting the management, TA Research said Maybank’s management explained that the push for full ownership is driven by the goal of positioning Maybank Ageas as Malaysia’s national insurance and takaful champion, while giving Maybank the flexibility to expand more aggressively across South-East Asia.
The move ties directly into the group’s ROAR30 strategy, which aims to cement Maybank’s leadership in Islamic finance and establish it as a leading regional wealth manager.
By shifting from a joint venture to full control, Maybank can better integrate banking and insurance, streamline regional operations, and unlock stronger cross- selling opportunities across its 14 million customers.
“The upside is significant as currently, only 24% of Maybank’s customers hold insurance with Etiqa. Management is targeting more than 10% customer growth and raising the product holding ratio from 1.6 to above two by 2030.”
The management also highlighted that the P/BV multiple is expected to ease toward 1.8 times once the deal closes, as the insurance arm continues to deliver profit through the year.
While they stopped short of calling it a “control premium”, they emphasised that full ownership gives Maybank the ability to reset terms and remove constraints that existed under the joint venture structure.
This includes better aligning sales incentives and streamlining operations across Malaysia, Singapore, Indonesia, the Philippines, and Cambodia, according to TA Research.
