ALLIED BANKERS Insurance Corp. (ABIC) has completed its purchase of PNB General Insurers Co., Inc. (PBGen) as it settled the third and last tranche of its payment to the Philippine National Bank (PNB) ahead of the deadline, the listed lender said on Tuesday.
PNB said in a regulatory filing that it received P366.15 million from ABIC for the third and final installment payment for PNBGen on March 31, ahead of the June 21 deadline for the last tranche.
This completes ABIC’s P1.52-billion purchase of PNB’s entire 65.75% stake in PBGen and also marks the bank’s exit from the nonlife insurance space.
ABIC is the nonlife insurance arm of LT Group, Inc. The move to sell PBGen is part of LT Group’s efforts to consolidate its nonlife insurance businesses.
The share purchase agreement was signed on Dec. 29. The proceeds of the transaction will be used for general corporate purposes.
PBGen offers coverage for fire and allied perils, marine, motor car, aviation, surety, engineering, and accident insurance, among others.
PNB has said it will remain involved in the bancassurance business. The bank is also in the life industry via Allianz PNB Life Insurance, Inc., which is a joint venture with German firm Allianz SE.
“The bank will remain in the bancassurance space to support its strategic growth plans and at the same time eliminate insurance underwriting risk,” the lender added.
PNB saw its net income slump by 73% year on year to P2.6 billion in 2020 after increasing its loan loss reserves to P16.9 billion, five times higher than the year-ago level.
It said it allocated loan loss reserves for the worst-hit sectors during the pandemic, including real estate, transportation, wholesale and retail trade to manage risk exposures.
Shares in PNB went up by five centavos or 0.22% to close at P22.85 apiece on Tuesday. — BML