Sunday, January 31, 2010
OCBC wraps up deal for ING private banking unit
Business Times Malaysia Published: 2010/01/30
SINGAPORE/AMSTERDAM: ING Group NV completed the sale of its Asian private banking unit to Singapore's OCBC, the biggest deal in the private banking sector since the worldwide financial crisis.
Netherlands-based ING said yesterday that the sale, which is in line with its strategy to focus on fewer franchises and reduce the group's complexity, will give it an estimated net profit of approximately ?300 million (?1 = RM4.76).
The new unit will be called Bank of Singapore Ltd and will be led by Renato de Guzman, former head of ING Asia Private Bank, OCBC said in a statement.
Guzman said in a statement the private bank plans to grow and capture greater market share in existing and new markets.
Oversea-Chinese Banking Corp agreed to buy the ING unit for US$1.5 billion (US$1 = RM3.41) in October 2009 in a deal which would elevate it to Singapore's No. 2 bank by assets.
ING said it will continue its private banking activities in China through its stake in Bank of Beijing, in India through ING Vysya Bank and in Thailand through TMB Bank.
Its private banking activities in the Benelux and in central and eastern Europe belong to its core businesses, it added.
OCBC beat HSBC Holdings plc in the bidding and the deal helped more than triple its private banking assets to US$23 billion.
With the acquisition, OCBC now has 200 private bankers and may opt to add another 30, Guzman said at a news conference.
"We have all the elements to be able to build Asia's global private bank," he said. "First goal is to be number one in our home market - Southeast Asia."
Guzman said the new unit wanted to grow its business in Hong Kong and Taiwan and build a stronger onshore private banking business in China. The private bank also plans to expand in the Middle East and Europe, he said.
OCBC chief executive David Conner said the private bank would be "earnings accretive" this year and will boost its return on equity. "Asia's exceptional economic growth and savings rates will no doubt generate a surge of private wealth creation,".
In an interview with Bloomberg on Wednesday, Guzman said rich individuals from Europe and the Middle East are moving money from Switzerland to Asia.
"It's a favourable trend," Guzman said. "Having a Singapore bank with no ties to Switzerland is an attractive proposition for a lot of them."
Guzman, 59, is trying to capitalise on wealthy clients seeking to shift funds from UBS AG and other Swiss banks amid a dispute with the US on disclosing client data to tax authorities. - Reuters, Bloomberg
HSBC Amanah Takaful to launch 7 products in 2010
Business Times Malaysia
By Rupinder Singh Published: 2010/01/29
HSBC Amanah Takaful (Malaysia) Sdn Bhd, the Islamic insurance arm of HSBC Bank Malaysia Bhd, plans to launch up to seven products this year.
Chief executive officer Zainuddin Ishak said the company is now focused on traditional long-term plans such as retirement and medical health.
HSBC Amanah Takaful aims to maximise its bankatakaful partnership by leveraging on its parent HSBC Bank Malaysia's client base.
HSBC Amanah Takaful is a joint venture between HSBC Insurance (Asia Pacific) Holdings Ltd, Jerneh Asia Bhd and the Employees Provident Fund.
According to a recent HSBC Asian Insurance Monitor survey, more Malaysians have taken up medical insurance in the past 12 months.
The survey showed over one-third of 480 respondents will rely on medical insurance or government for critical illness cover, 26 per cent say they will have to withdraw their bank savings.
"Having witnessed the global economic downturn, Malaysians have become aware of the threats that may hinder the growth of their wealth, and realised that they may not have enough savings for achieving their long-term financial goals," said Zainuddin.
The survey by Nielsen covered Malaysia, Hong Kong, Singapore, Taiwan, South Korea, India and China and was conducted from December 10 to 24 2009.
Great Eastern not in talks to sell stake in Malaysian unit
Business Times Malaysia
Published: 2010/01/27
GREAT Eastern Holdings Ltd (GEH) said it is not in talks to sell a stake in its Malaysian insurance arm, Great Eastern Life Assurance (Malaysia) Bhd (GELM).
"We wish to state that we are currently not in talks with any party in relation to a sale of shares in GELM," the Singapore-based company said in a statement released in Kuala Lumpur yesterday.
It was responding to yesterday's Business Times article which quoted a source that Khazanah Nasional Bhd was among several investors keen to buy a stake in GELM to help the latter build a takaful business.
In the statement, GEH reiterated that it was evaluating various options and opportunities presented by the liberalisation of the Malaysian financial sector, including the issuance of new licences in the insurance and takaful sectors, to grow and strengthen its market leadership.
"We have submitted an application to Bank Negara Malaysia for a family takaful licence. The outcome of the application is not yet known," it added.
GEH said it will make the appropriate announcements should there be any significant developments.
Khazanah said among suitors for Great Eastern
Business Times Malaysia By Rupinder Singh Published: 2010/01/26
It is not clear how big a stake in Great Eastern Life would be up for sale, but it is believed to be up to 30 per cent.
A group of potential suitors, including state-owned investment agency Khazanah Nasional Bhd, is said to have lined up for a stake in Singapore's Great Eastern Life Assurance (Malaysia) Bhd to help realise the insurer's takaful ambition.
Khazanah declined to comment on such talk, which first emerged when industry sources said that one of the conditions for Great Eastern Life to secure a takaful licence from Bank Negara Malaysia was that its Singapore parent had to sell down a portion of its conventional insurance business here to a local party.
Sources also said that Great Eastern was one of the front runners to secure one of two family takaful licences to be issued by Bank Negara soon.
Great Eastern Life is a wholly-owned subsidiary of Great Eastern Holdings and operates in Malaysia. However, it does not have a takaful licence as yet.
It was not clear how big a stake in Great Eastern Life would be up for sale, but it was believed to be up to 30 per cent.
A source in Great Eastern said that the insurer had been directed to look at several shareholding options.
"We were asked to look for a new shareholder. We are evaluating several options now," he said.
He said that if the company failed to find a shareholder, it might consider an initial public offering after obtaining a takaful licence.
"Another option on the cards could be something that has not been done in the country before," the source said, without elaborating.
Should Khazanah buy the Great Eastern Life stake, it would not be its first investment in a takaful or insurance venture.
Khazanah is the joint largest investor in the Singapore- based Asia Capital Reinsurance (ACR) and ACR ReTakaful Holdings Ltd.
In 2007, Khazanah and 3i, a leading private equity and venture capital company in the world, each committed US$200 million (RM682 million) for a 32 per cent stake in ACR.
The following year, Khazanah together with ACR and Dubai Banking Group (DBG) formed the world's largest retakaful group, ACR ReTakaful, in which Khazanah and DBG each hold 40 per cent interest.
ACR owns the remaining 20 per cent and, by virtue of Khazanah's 32 per cent stake in ACR, has the largest effective shareholding in ACR ReTakaful.
Great Eastern's top executives have voiced their takaful intentions loud and clear on many occasions.
It recently roped in former Prudential BSN Takaful Bhd chief executive officer Mohamad Salihuddin Ahmad to head its future Islamic insurance operations.
The group is believed to have put in place a project team in Singapore to spearhead the takaful operations.
Last year, Great Eastern Malaysia director and chief executive officer Koh Yaw Hui said the company would use its strong channels and bancassurance business, through holding company Oversea-Chinese Banking Corp Ltd (OCBC), as a platform to launch takaful products if it succeeded in securing the licence.
Woman with S$8.8m takes bank to court
www.channelnewsasia.com
By Zul Othman, TODAY | Posted: 26 January 2010 0827 hrs
SINGAPORE: An elderly woman took OCBC Bank to court on Monday because the latter refused to allow her to close her account containing S$8.8 million.
The bank rejected 94-year-old Madam Hwang Cheng Tsu Hsu's repeated requests as it had doubts on her mental capacity.
The dispute started on 12 May 2008, when Madam Hwang and her adopted daughter, Madam Amy Hsu, 45, applied to open a joint account.
The bank said "no" but gave no explanation, the women claimed.
On Monday, the bank's lawyers Adrian Wong and Jansen Chow told the High Court that their client was simply fulfilling its "legal as well as moral duty owed to an elderly customer, with whom (it has) enjoyed a long standing relationship". "It was only after Amy came into the picture in May 2008 that things took a drastic turn for the worse," they said.
Court documents said OCBC became uncomfortable because the younger woman was giving the instructions, not Madam Hwang. During a separate interview, Madam Hwang was also unable to lucidly explain why she was at the bank.
Even though the elderly woman had granted Madam Hsu the power of attorney, OCBC's lawyers said "this is but a red herring as ... such powers executed by a person of mental incapacity or subsequent incapacity is invalid".
However, Madam Hwang's lawyers Adrian Ee and Senior Counsel Michael Khoo countered that the bank's officers who had interviewed Madam Hwang were "incompetent" to have come to this conclusion based on two brief interviews. None of them were "qualified as psychiatrists".
Her lawyers produced two witnesses on Monday.
Dr Sitoh Eyih Yiow, who treated Madam Hwang in the last 18 months, told the court that, while her dementia has been more pronounced in recent months due to other conditions, her mental state will improve as her health gets better.
Another psychiatrist, Dr Lim Hsin Low, testified that he had examined her and found that she had the mental capacity to draw up a will.
The trial, which continues on Tuesday, is expected to run till February 12.
Healthcare group to invest in new Malaysian hospitals
The Malaysian Insider
APRIL 22 – Regional healthcare provider Columbia Asia plans to invest RM365 million (S$151 million) in six new mid-sized community hospitals in Malaysia, including one in Nusajaya in south Johor, scheduled to open this year.
Headquartered in Malaysia, Columbia Asia Group of Companies has 13 hospitals in the region – including five in Malaysia, India (four), Vietnam (two) and Indonesia (one) – and treats more than 50,000 outpatients a month.
In addition to the six new hospitals in Malaysia which are in various stages of construction, the company plans to build 14 in India. To-date, the group has invested about US$700 million in Asia, half through equity and the rest via debt issues.
Locally, it is in the midst of building four community hospitals around the Kuala Lumpur perimeter, as well as two others in Bintulu, Sarawak, and Nusajaya, and is considering a bond issue to raise financing as well as to retire some of its existing debt.
Singapore does not currently figure in its expansion plans because of high land costs, chairman of Columbia Asia Group Rick Evans said yesterday at a media briefing, but observed: "We will have a hospital in Nusajaya five minutes from the (Tuas) bridge."
Malaysia and India are attractive to Columbia Asia because of their large middle class, rule of law and wide use of English, he said. China? "It lacks rule of law."
Incorporated in 1996, Columbia Asia Sdn Bhd is 70 per cent held by Columbia Asia Group of Companies, and the balance by the state pension fund, the Employees Provident Fund.
The local entity owns the Malaysian and Indonesian hospitals and gets a fee for operating Columbia Asia hospitals in Vietnam and India.
Although not as well known as some of the other private hospital groups in the country, the group's focus on mid-income patients and third-party payers – insurance companies and employers – has made it increasingly popular with those attracted to its model of short-length in-patient stay.
Third-party payers now account for over 60 per cent of its revenue, which according to Evans averages RM3 million a month per hospital, but excludes doctors' fees, which constitute 25-30 per cent of a hospital's revenue.
Companies like Columbus Asia are "impervious to the economic problems" because of their focus on affordable healthcare, he said.
"Our designs are the result of our belief that hospitals in the 21st century are going to be much smaller than those built in the past, and that they would rely heavily on technology. There are more computers in our community hospitals than there are in-patient beds."
The 80-bed hospitals are staffed by some 300 people, nearly all of whom are locals. As to how much cheaper its hospitals are compared to others, Evans said doctors charge 75-80 per cent of the Schedule of Fees for procedures listed by the Malaysian Medical Association.
Of its 11 hospitals in Malaysia, one is a nursing and rehabilitation centre, located in Shah Alam, Selangor.
Although its growth has been slower, he believes demand for extended healthcare facilities that offer longer-term services would grow in the future, as has been the case in the US. – Business Times Singapore
Prudential Assurance Looks To Increasing Bumiputera Market
BERNAMA January 20, 2010 14:17 PM
KUALA LUMPUR, Jan 20 (Bernama)-- Prudential Assurance Malaysia Bhd (Prudential) is looking to enhance its Bumiputera market.
It hopes to do so by increasing the number of Bumiputera agents from the current 3,000 wealth planners.
Its chief executive officer, Charlie Oropeza said tapping into the large Bumiputera market was a strategic move as it was growing economically, especially with the young population.
"The major strategy direction is to penetrate the Bumiputera market. What we are doing is growing our Bumiputera agents, for them to be able to reach out and penetrate this market segment," he told reporters after handing over retirement funds to the winners of the insurance firm's, "Adam's Number" contest.
Prudential has a total of 11,000 agents at the moment.
He said although Prudential saw an increase in its Bumiputera market last year, it was largely underserved and untapped.
Oropeza also said he was optimistic of the company's overall business this year, following better economic indicators.
"It's not just in terms of growth but also our profitability," he explained.
On the contest, Oropeza said it was into the third year with the aim of reaching out to the younger generation, to highlight the importance of savings for the long term.
As those aged 25 years and below, make up about 50 per cent of Malaysia's population, he said Prudential would be introducing more products this year to attract them.
Malaysian insurers in for better times
The Star Malaysia Monday January 25, 2010 By DALJIT DHESI
PETALING JAYA: Despite facing some hurdles, the local insurance industry has a promising outlook with new life business weighted premium forecast to grow 12.5% to RM3.6bil this year.
Industry players attribute the optimism to improving economic conditions and the Government's various pump-priming measures.
Life Insurance Association of Malaysia (LIAM) president Md Adnan Md Zain expects a "good" outlook for the life insurance industry based on last year's strong performance compared with 2008 when there was almost no growth due to the global financial meltdown.
Results of the first three quarters of 2009 showed new business sales grew by 16% on weighted premium basis over the previous corresponding period.
Since last year was relatively a stronger year, LIAM expects new business weighted premium growth for 2009 to be between 15% and 20%.
"This reflects a more upbeat consumer sentiment and confidence in terms of life insurance investment for protection and savings. We expect better performance for the industry in 2010 following the projection of a stronger economic performance.
"The gross domestic product growth is forecast at 2% to 3% in 2010 (2009: minus 3%), driven by domestic demand and recovery in external demand. The services sector is also anticipated to expand by 3.6% in (2009: 2.1%). This augurs well for the industry,'' Adnan said in an e-mail reply.
With Malaysia's penetration rate of insurance at 41%, which was low compared with developed economies, he said there was plenty of scope for the industry to grow further.
Measures announced in Budget 2010 on micro-insurance and annuity products are also expected to further boost the life insurance industry.
General insurer ACE Synergy Insurance Bhd (ACE Malaysia) CEO and managing director Raj Nanra said the liberalisation of the financial sector would be a catalyst for the industry's growth.
"For this year and the next, we can expect more competition in the insurance industry in terms of product innovation and distribution methods.
"Our multi-product, multi-channel strategy will help us stay ahead of the competition and we aim to expand our reach through broader distribution channels and the introduction of niche products to suit the changing lifestyle of Malaysians," he said.
The actions taken by the Government to support the small and medium enterprises (SMEs) would help drive growth in the commercial risk sector.
Coupled with the demand from major corporations, which viewed insurance as a key risk management tool, Nanra said the market would very likely see a rise in the commercial, property, casualty and liability sectors.
SMEs would be a key market for ACE Malaysia's local and regional expansion to boost business this year, he added.
To this end, he said ACE Malaysia had made significant investments in technology, branch network and recruitment to expand its reach to consumers and the SMEs.
It also tied up with the SMI Association of Malaysia last year to provide consultation to their members on risk management, he said.
Prudential Assurance Malaysia Bhd CEO Charlie E. Oropeza said its focus this year included beefing up its bumiputra agency force, bancassurance and investment-linked funds. Prudential now has 11,000 agents, of whom about 3,000 are bumiputras.
"One area that will boost profitability going forward will be investment-linked funds," he said.
Prudential's conventional investment-linked business in the first nine months of 2009 grew 27% to RM295mil, which was one of the highest in the industry.
On the type of products that would impact the market, Adnan said amid the economic recovery and improvement in consumer sentiment, products that catered to investment needs were expected to perform strongly this year.
These included annuity products in view of the additional RM1,000 tax relief made available on premiums paid on annuity products under Budget 2010, he said.
Adnan said the main challenges this year would be to deliver an investment return in line with or better than the expectation of policyholders for investment-linked products and participating policies.
The latter is a policy which shares in the surplus of a life insurer via bonuses or dividends.
Adnan hoped 2010 would continue with the bullish trend in the equities market that started in March 2009, which would in turn benefit investment-linked products.
ACE Malaysia's Nanra said this year would still pose a challenge for the industry, especially the personal lines and retail insurance for individuals, as consumers' priorities had changed since the onset of the financial crisis two years ago.
"However, as insurance is considered a key risk management tool in most corporations, the market will still see a demand for products in the commercial, property, casualty and liability sectors even in a tough economic climate,'' he added.
Market liberalisation would likely see a re-ordering of players in the insurance industry and some would be in a position to take advantage of these challenges, Nanra said.
He also expects the market to witness more mergers and acquisitions as consolidation occurs in the industry.
The power of listening
The Sun Updated: 10:20AM Tue, 19 Jan 2010
Eva Yeong
PRUDENTIAL Corporation Asia recently launched "The Power of Listening", its largest branding campaign in its 85-year history in Asia.
The campaign reinforces the company's "Always Listening. Always Understanding" philosophy that has been featured in its operations since 1995.
The philosophy emphasises Prudential's commitment to providing products and services that meet customers' individual financial needs.
"Today, financial services customers expect empathy as well as expertise. We have consistently differentiated ourselves as we have harnessed the power of listening to build our well-trusted team of financial consultants and agents in Asia," said Prudential chief marketing officer Julie Lyle.
She said that in the current environment, it is more important than ever to listen to customers and understand their needs.
"We went to the market and asked customers how they felt before embarking on this campaign.
We found that our listening platform continues to resonate strongly with people across Asia who want to play an active role in building and protecting their wealth."
Initially launched in Singapore, the campaign will be rolled out progressively in seven languages in nine markets across the region through 2010 and into 2011.
Developed by Ogilvy & Mather Advertising Hongkong, it features a television advertisement complemented by print, outdoor, digital and online advertisements.
The Malaysia campaign will begin this week across multiple channels in English, Bahasa Malaysia and Chinese, running until the end of next month.
Prudential Assurance Malaysia Berhad chief executive officer Charlie Oropeza said the campaign reinforces the company's long-standing relationship with families in Malaysia.
"This is the Prudential difference. The campaign will be welcomed by more than 10,000 of our wealth planners and agents who have listened, understood and supported the financial needs of generations of families in this country," he said.
Prudential makes up the life insurance, asset management and consumer finance operations of Prudential plc in Asia.
Tokio Marine Insurans Names New Chief Executive Officer
BERNAMA January 22, 2010 17:21 PM
KUALA LUMPUR, Jan 22 (Bernama) -- Tokio Marine Insurans (Malaysia) Bhd on Friday announced the appointment of Dr Michael Heng Kiah Ngan as its new chief executive officer.
Heng, who was previously the company's deputy chief executive officer, replaced Phang Kwang Chee who has been transferred after nine years at the helm, Tokio Marine said in a statement.
"Phang helped to build one of the most dynamic and fastest growing non-life insurance companies in Malaysia," Heng said.
"From a lowly 48th position when the company was acquired in 1999, we became the fifth largest general insurer in Malaysia at the end of 2009," he said.
Heng said despite an initial difficult and challenging operating environment, Tokio Marine recorded a 20 per cent premium growth in 2009.
It secured over RM700 million premium last year, up from RM580 million in 2008, with an estimated net operating and investment pre-tax profit of about RM80 million, he said.
Heng said the company's paid-up capital was increased by another RM178 million last year.
"Despite the tough market conditions, we have been able to surpass our targets comfortably," he said.
Etiqa Insurance Expects Good Response To Latest Plan
BERNAMA January 20, 2010 14:43 PM
KUALA LUMPUR, Jan 20 (Bernama) -- Etiqa Insurance Bhd expects to see good response to its recently launched Triple Lifestyle Protector plan which offers multiple benefits under one policy.
The plan provides protection benefits and guaranteed cash returns every three years to policyholders and is available for all ages, said chief executive officer and director Datuk Aminuddin Md Desa.
"The new plan guarantees a cash payment of 15 per cent of the sum insured every three years starting from the fifth year onwards. It also guarantees a 100 per cent return of sum insured to the policyholders as maturity benefit," Aminuddin said in a statement Wednesday.
"At a fixed premium rate throughout the term, policyholders have the option to choose either a term of 20 years premium payment or up to 85 years old," he said.
According to him, the plan will help customers who want a comprehensive financial solution without the hassle of having to manage too many products and plans.
Mum and paralysed son cheated of insurance payout
The Star Malaysia Thursday January 21, 2010
By NELSON BENJAMIN
JOHOR BARU: A mother, whose nine-year-old son was paralysed from the waist down in a road accident in 1992 was awarded RM250,000 in insurance damage by a court.
But her lawyer gave her only RM40,000 and allegedly kept the rest. Police are now looking for the lawyer.
The female lawyer is said to have paid her client only a part of the insurance payout about 18 years ago.
It is learnt that a police report was only lodged recently after the woman discovered that the lawyer, who had kept more than RM120,000 purportedly to file for an appeal, had not done anything.
Sources said the lawyer had told the mother that she had placed about RM17,000 in Amanah Raya so the boy could only withdraw the money when he reached the age of 21.
However, the mother got a shock when, after her son turned 21, the public trustee informed her that no such deposit was ever made. She then lodged a police report and a complaint with the Bar Council.
It is learnt that out of the total insurance payout, the woman only received 16% while the rest had been kept by the lawyer, claiming that it was for legal fees, the Amanah Raya deposit and costs to file for an appeal.
Police investigations showed that the lawyer has since disappeared and that the firm closed down several years ago.
When contacted, Johor Baru South OCPD Asst Comm Zainuddin Yaacob confirmed the case and said investigations were being carried out under Section 409 of the Penal Code for CBT.
If convicted, the lawyer faces a jail term of between two and 20 years, whipping and a fine.
"We are looking for this lawyer to assist in our investigations, he said, appealing to those with information to contact the police hotline at 07-221 2999.
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