This article first appeared in The Edge Malaysia Weekly on April 14, 2025 - April 20, 2025

MNRB Holdings Bhd (KL:MNRB) is understood to be looking to hive off its takaful insurance businesses, held under two wholly-owned entities, Takaful Ikhlas Family Bhd and Takaful Ikhlas General Bhd, sources say.

It is understood that while the requisite approvals for the sale have yet to be obtained, talk of the possible disposal has elicited interest from several foreign players and at least one local banking group.

When asked about the potential sale of Takaful Ikhlas Family and Takaful Ikhlas General, MNRB responded that it “is not providing any comments” to questions from The Edge. Other questions as to why MNRB is looking to sell the takaful businesses also went unanswered.

It is also unclear if MNRB is looking at retaining a stake or selling its entire shareholding in the two takaful insurance entities.

Should the sale of the two takaful entities materialise, MNRB will only have its reinsurance business, which could adversely impact its earnings. MNRB’s reinsurance business has been doing well.

For its nine months ended December 2024, MNRB chalked up net profits of RM300.8 million on the back of RM2.85 billion in revenue. For the corresponding period a year ago, MNRB managed to rake in RM195.72 million in net profits from RM2.61 billion in revenue.

For its financial year ended March 31, 2024 (FY2024), MNRB registered a 266.4% year-on-year jump in net profits to RM433.54 million on RM3.51 billion in revenue, which was a record performance. The performance was driven by the reinsurance segment, which contributed RM388.4 million to the bottom line.

Annualised, FY2025’s net profit could breach the RM400 million mark again.

For the nine months ended December 2024, MNRB’s revenue for its general takaful business rose 13.8% y-o-y to RM666.1 million while profit before tax (PBT) increased 5% to RM58 million. On the other hand, revenue from the family takaful segment slipped 1.8% y-o-y to RM661.7 million while PBT fell 59.5% to RM6.4 million from RM15.8 million.

In total, the takaful segment registered PBT of RM64.4 million from RM1.33 billion in revenue.

As at end-2024, MNRB had cash and cash equivalents amounting to RM108.88 million and borrowings of RM620 million.

On its prospects, MNRB says, “As the financial year ending March 2025 is drawing to a close, the group maintains a cautiously optimistic outlook of its full financial year financial performance. Despite the external challenges and competitive environment, the group is confident that the steadfast execution of the various identified initiatives under its business plan will result in a credible performance.”

Talk of MNRB selling its takaful business has been making the rounds for at least a year.

While not confirmed as yet, one of the interested parties is said to be Allianz Malaysia Bhd (KL:ALLIANZ), while local development financial institution Bank Rakyat Bhd is also said to be keen on the two units, Takaful Ikhlas Family and Takaful Ikhlas General.

There is also talk that Allianz may partner a fund that has links to MNRB and seek to acquire the takaful businesses, but plans are understood to be in the preliminary stages.

MNRB is 54%-controlled by Permodalan Nasional Bhd and its related funds.

At present, Bank Rakyat and Lembaga Tabung Haji-controlled Syarikat Takaful Malaysia Keluarga Bhd (KL:TAKAFUL) have a collaboration, offering family takaful products, through Bank Rakyat’s distribution channels.

The other interested parties in MNRB’s takaful business are not known.

Currently, there are 15 takaful insurance operators in Malaysia. Other than the two owned by MNRB, the others are AIA Public Takaful Bhd, AmMetLife Takaful Bhd, Etiqa Family Takaful Bhd, Etiqa General Takaful Bhd, FWD Takaful Bhd, Great Eastern Takaful Bhd, Hong Leong MSIG Takaful Bhd, Prudential BSN Takaful Bhd, Sun Life Malaysia Takaful Bhd, Syarikat Takaful Malaysia Am Bhd, Syarikat Takaful Malaysia Keluarga Bhd, Zurich General Takaful Malaysia Bhd and Zurich Takaful Malaysia Bhd.

As it is a tightly regulated business, the takaful licence carries a certain cachet.

Allianz had at end-2010 obtained the requisite approval from Bank Negara Malaysia to commence negotiations with MNRB to acquire Takaful Ikhlas Sdn Bhd, the forerunner to the two entities today. The parties then mutually agreed to end negotiations in July 2011. It is unclear what led them to cease talks.

Allianz’s interest in MNRB’s takaful business back in 2010 came about after Bank Negara liberalised the industry, raising the foreign equity participation limit to 70% in 2009, from 49% previously.

Last Thursday, MNRB closed at RM1.86, giving it a market capitalisation of RM1.46 billion. 

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