CHINA BANKING Corp. (China Bank) will be infusing additional capital into its insurance unit to support business expansion, the lender said yesterday.
In a disclosure, the Sy-led bank said its board of directors approved on Wednesday the infusion of P40 million into Manulife China Bank Life Assurance Corp. (MCBL).
This forms part of a P100-million capital hike for the insurer matched by a P60-million investment from the Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife Philippines).
“On top of complying with the higher capital requirements for insurance companies, the additional capital will improve MCBL’s capacity to underwrite more business and enhance its competitive position,” China Bank told the Philippine Stock Exchange.
Republic Act 10607 or the Amended Insurance Code of the Philippines requires existing insurers to have a paid-up capital of P900 million by December 2019, higher than the P550 million mandated as of December 2016. The minimum capital requirement will rise to P1.3 billion by December 2022.
MCBL held P500 million in paid-up capital as of end-2017, according to latest data from the Insurance Commission (IC).
China Bank partnered with Manulife for a bancassurance joint venture in 2007, with the listed lender initially taking a five percent stake in MCBL before it was raised to 40% in 2014. This arrangement allows agents and tellers to sell insurance products at China Bank branches.
The bank reported a P5.56 billion net income for the first nine months, down 2.1% from the P5.68 billion profit booked during the comparable period in 2017.
China Bank shares closed at P27.65 apiece on Thursday, 0.36% higher than the previous day’s close. — Melissa Luz T. Lopez