HONG KONG (REUTERS) HSBC Holdings' Asia Pacific insurance unit has received regulatory approval to divest its 49 per cent stake in the Malaysian life insurance joint venture to Hong Kong-based FWD Group, owned by tycoon Richard Li.
The deal to sell the stake in HSBC Amanah Takaful Malaysia Bhd has got the approval from the Malaysian central bank, and is expected to be completed in the first half of next year, the UK-headquartered lender said in a statement late on Thursday (Dec 20).
The financial details of the transaction were not disclosed.
"We have decided to exit the takaful manufacturing business and focus on our banking operations in Malaysia," Stuart Milne, HSBC Malaysia unit chief, said in the statement, adding the bank would continue to distribute insurance products in that market.
Takaful refers to Islamic insurance products. In financial dealings, takaful firms follow religious guidelines including bans on interest and monetary speculation, and a prohibition on investing in industries such as alcohol and gambling.
Reuters reported in August that FWD had agreed to buy a 49 per cent stake in HSBC Amanah Takaful initially, with plans to ultimately own a majority by buying some shares from the existing partners.
Malaysia's JAB Capital Bhd owns 31 per cent in the venture, while Employees Provident Fund Board of Malaysia controls 20 per cent.
A foray into the South-east Asian country by FWD will add to its Asian market footprint that already covers Indonesia, Japan, Singapore, the Philippines, Thailand and Vietnam.