Public Bank expands into insurance with major LPI Capital stake

Public Bank expands into insurance with major LPI Capital stake | Insurance Business Asia

Insurance News

Public Bank expands into insurance with major LPI Capital stake

Family of insurance company’s late founder sells shares

Insurance News

By
Roxanne Libatique

Malaysian major bank Public Bank Berhad has signed an agreement to acquire a 44.15% interest in LPI Capital Bhd for RM1.72 billion, marking a significant expansion into Malaysia’s insurance market.

The deal was finalised on Oct. 10, with the shares being purchased from the estate of Tan Sri Dato’ Sri Dr Teh Hong Piow and Consolidated Teh Holdings Sdn Bhd.

LPI Capital, a publicly listed general insurance company, has been operating for over six decades and manages a network of 21 branches in Malaysia. The company also operates in Singapore and Cambodia through partnerships.

Public Bank’s acquisition of stake in LPI Capital

Public Bank’s CEO, Tan Sri Dato’ Sri Dr Tay Ah Lek (pictured, left), emphasised the strategic nature of the acquisition, stating that it would allow Public Bank to increase its presence in the general insurance sector.

“This will 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,” he said.

The deal follows Public Bank’s earlier expansion into Vietnam, where it acquired Public Bank Securities Vietnam Company Limited, extending its financial services portfolio to include securities trading in the region.

Tay noted that the acquisition supports Public Bank’s efforts to adopt a more comprehensive “Universal Banking Model,” integrating multiple financial services. He also highlighted the opportunities for cross-selling between Public Bank and LPI Capital, using both entities’ distribution networks to reach more customers across Malaysia.

The transaction, classified as a related-party deal, will require the approval of non-interested shareholders at an Extraordinary General Meeting (EGM) scheduled for a later date. Upon shareholder approval, Public Bank will be obligated to initiate a mandatory takeover offer for the remaining shares in LPI Capital.

Public Bank has already received regulatory clearance for the acquisition from Bank Negara Malaysia and the Ministry of Finance, with the transaction expected to close by the first quarter of 2025.

Sale of some shares in Public Bank

Separately, Diona Teh Li Shian (pictured, right), daughter of the late Tan Sri Teh Hong Piow, announced that the Estate and Consolidated Teh Holdings will conduct a phased sale of some of their shares in Public Bank over the next five years, in accordance with Malaysia’s Financial Services Act.

Diona Teh stated that the family remains committed to Public Bank’s future, despite the reduction in their shareholding.

“To honour [my father’s] legacy and to show our deep appreciation and gratitude, we will be undertaking an exercise to distribute a portion of our Public Bank shares at a discount to all employees, directors, and eligible shareholders of the Public Bank Group,” she said.

The transaction positions Public Bank to significantly expand its insurance offerings while reinforcing the Teh family’s long-term commitment to the institution.