AMMB Holdings Bhd is racing to complete the sale of its insurance arm before the end of its financial year on March 31, 2014 (FY14), so that the money gained from the sale could be recognised in FY14, thereby boosting its revenue for 2013.
“We have completed the phase 2 bid process and we will submit the name of the buyer to Bank Negara Malaysia by end of 2013.
“We hope to conclude this deal by the end of this financial year, which ends on March 31, 2014,” AMMB group MD Ashok Ramamurthy told the media in Kuala Lumpur yesterday.
Though declining to disclose the financial size of its insurance arm, Ashok affirmed that it is about the size or slightly smaller than mid-sized Uni.Asia Life Assurance Bhd.
Uni.Asia Life Assurance was sold by DRB-Hicom Bhd and United Overseas Bank (M) Bhd to The Prudential Insurance Co of America and Bank Simpanan Nasional in a RM518 million deal, which is expected to be concluded before year-end.
Ashok remained mum on whether AMMB would sell only 51% or 70% of its stake in AmLIFE Insurance Bhd while maintaining the company’s stand of keeping a majority stake in its takaful business, AmFamily Takaful Bhd.
In January this year, AMMB bought back a 30% stake in its two insurance divisions for RM245 million from Resolution Ltd, ending its partnership with the UK-based firm.
AMMB declared a 16% rise in the second-quarter (2Q) ended Sept 30, 2013, net profit to RM441.2 million from the RM380.4 million declared in the corresponding period of 2012, supported by income growth, integration of acquisitions and lower allowances.
Its revenue for the same period rose 19% to RM2.39 billion from RM1.99 billion previously while its earnings per share stood at 14.67 per share compared to 12.68 a year ago.
AMMB declared a 7.2 sen dividend compared to the seven sen declared a year ago, representing a payout of 24%.
For the company’s first-half results, the group posted a 10% increase in net profit to RM906.5 million from the RM823.3 million declared a year ago.
Revenue increased 19% to RM4.78 billion from RM4.02 billion a year ago while earnings per share grew to 30.16 sen compared to 27.47 sen previously.
AMMB said most divisions delivered double-digit profit growth and its two recent acquisitions in general insurance via Kurnia Insurance Bhd and credit card via MBF Cards (M) Sdn Bhd are delivering on synergies.
Ashok said loan growth was slower as the company is more selective in its customer segments and economics sectors while continuing to experience good deposit growth.
On a related note, Amcorp Properties Bhd declared an 80.5% drop in its 2Q ended Sept 30, 2013, net profit to RM2.77 million from the RM14.22 million declared a year ago, due to realisation of profit from property disposal in the same period of 2012.
Revenue for the same period shrunk 20.5% to RM23.9 million from RM30.1 million. Amcorp Group Bhd owns 72% of Amcorp Properties Bhd and 16% of AMMB.