KUALA LUMPUR (Aug 3): Malayan Banking Bhd (KL:MAYBANK) expects its RM4.83 billion buyout of the remaining 30.95% stake in Etiqa’s holding company, Maybank Ageas Holdings Bhd to immediately lift the group's profit after tax and minority interests (Patami), earnings per share (EPS) and return on equity (ROE).

Based on financial year 2025 (FY2025) pro forma figures, the acquisition would increase Maybank's Patami by 1.69% to RM10.69 billion, while earnings per share would rise 0.81% to 87.75 sen. Group ROE pro forma numbers would improve to 12.08% from 11.71%, it added.

Maybank Ageas, the holding company of Etiqa's insurance and takaful businesses, generated RM1.02 billion in Patami in FY2025, up from RM838 million in FY2024 and RM868 million in FY2023, representing a compound annual growth rate of 8.4% over the three-year period.

The insurer also recorded a return on equity of 12.3%, outperforming Maybank group's ROE of 11.7% for the same year. The insurer is also the world's fourth-largest takaful provider.

Maybank said Etiqa’s gross written premiums grew at a compounded annual growth rate (CAGR) of 9.2% between 2023 and 2025 to reach RM12.9 billion in 2025. Bancassurance contributed 40% of premiums, while regular premiums accounted for 35%.

Looking forward, Maybank is targeting mid-teens growth for the ROE for Maybank Ageas by 2030, while aiming for gross written premiums and contributions to grow at a CAGR of up to 15% annually between 2025 and 2030.

It also expects bancassurance to contribute about 50% of gross written premiums by 2030, up from about 40% in 2025, when regular premiums and contributions accounted for around 35% of the insurer's business.

The proposed acquisition will see Maybank gain full ownership of the holding company for Etiqa's insurance and takaful businesses in Malaysia and Singapore.

The transaction will be funded through a combination of internal and external funding sources, subject to Bank Negara Malaysia's approval. Maybank said it has submitted the necessary application, together with the implementation agreement and the agreed form of the share sale and purchase agreement.

The purchase price of RM4.83 billion reflects a price-to-book multiple of 1.98 times and a price-to-earnings multiple of 15.3 times, after adjusting for a proposed RM800 million dividend to be paid by MAHB upon completion. Under the arrangement, Ageas will receive RM248 million of the dividend while the remaining RM552 million will accrue to Maybank.

Maybank Investment Bank Bhd and Morgan Stanley Asia (Singapore) Pte Ltd are acting as financial adviser and international financial adviser, respectively, for the transaction.

At 4pm on Monday, Maybank’s share price was down by two sen or 0.18% to RM10.88, giving the group a market capitalisation of RM131.6 billion.