LT group consolidating non-life insurance interests

The group of tycoon Lucio Tan is consolidating its non-life insurance businesses under privately-held Allied Bankers Insurance Corp. (ABIC), while allowing banking arm Philippine National Bank (PNB) to monetize a noncore asset.

In a recent disclosure to the Philippine Stock Exchange, PNB said its board had approved the sale of 100 percent of shares held by PNB and PNB Holdings Corp. in PNB General Insurance Co. Inc. to ABIC for P1.52 billion.

The deal is subject to regulatory and other necessary approvals, according to the disclosure.

“For PNB, it’s rationalization of noncore business,” Wick Veloso said, when asked about the rationale for this transaction.

PNB has been working to unlock about P80 billion from an ongoing program to monetize valuable but currently low-earning real estate assets, thus boosting lending activities in the years ahead.

A stand-alone business outside the group’s publicly-listed entities, ABIC’s business portfolio has three key drivers: fire, motor and personal accident insurance. In eight years through 2018, ABIC has consistently grown its net profit by 13 percent yearly, leveraging on synergies with conglomerate LT Group Inc. and PNB. In 2019 alone, ABIC doubled its net income to a record-high of P128 million from P62 million. It also beat its target bottom line of P100 million for the year.

Gross premiums generated in 2019 hit P743.63 million, up from P614.75 millions in the previous year.

Assets as of end-2019 amounted to P3.14 billion, up from P2.74 billion in 2018.

Article and Photo originally posted by Inquirer last December 28, 2020 5:28am and written by Doris Dumlao-Abadilla. Minor edits have been made by REBPH to cater to its own readers.