By SHAUQI WAHAB
PUBLIC Bank Bhd plans to pay RM1.72 billion for a 44.15% equity interest in LPI Capital Bhd, allowing the nation’s third largest bank by asset size to expand its general insurance presence and drive home a universal banking model.
The bank today entered into a conditional sale and purchase agreement with the estate of the late Tan Sri Teh Hong Piow, founder of the banking group, and Consolidated Teh Holdings Sdn Bhd (ConTeh) to acquire close to 175.9 million ordinary shares in LPI Capital.
LPI, a company listed on the main market of Bursa Malaysia, has been in operations for over 60 years and is mainly involved in the underwriting of general insurance. It currently has 21 branches throughout Malaysia, one branch in Singapore and also operates in Cambodia through an associate company.
Public Bank MD/CEO Tan Sri Tay Ah Lek said the proposed acquisition would allow the enlarged Public Bank group to establish an immediate market presence and strong foothold in the general insurance segment in Malaysia as a comprehensive complementary service to its current financial services and Family Takaful offerings.
“The Proposed Acquisition is also in line with our Group’s plans to expand beyond just organic growth but through strategic acquisitions to expand our product and service offerings as evident by our recent completion of the acquisition of Public Bank Securities Vietnam Company Limited which allowed our Group to expand our financial services offering in Vietnam with the inclusion of securities trading services,” he said in a statement.
“With our existing network of over 260 branches located throughout the country, LPI Group would be able to leverage and expand its distribution channels and further grow its general insurance business in Malaysia. In addition, we would also be able to tap into the sales and distribution network of LPI and further expand our reach to cover clients and customers of LPI,” he said.
The statement noted that Public Bank has received the approval from the Ministry of Finance and Bank Negara Malaysia (BNM) for the proposed acquisition which was expected to be completed in the first quarter of 2025.
