THE INSURANCE Commission (IC) has approved the P1.5-billion sale of Philippine National Bank’s (PNB) nonlife insurance arm PNB General Insurers Co., Inc. (PNBGen), which is part of the Lucio Tan group’s move to consolidate its businesses.

PNB said in a filing with the local bourse on Monday that the insurance regulator on Dec. 29 okayed Alliedbankers Insurance Corp.’s (ABIC) acquisition of PNBGen.

PNBGen is the Tan-led bank’s nonlife insurer which offers coverage for fire and allied perils, marine, motor car, aviation, surety, engineering, and accident insurance, among others.

Meanwhile, ABIC is the privately held nonlife insurance arm of LT Group, Inc.

PNB President and CEO Jose Arnulfo “Wick” A. Veloso last month said the sale is part of LT Group’s efforts to consolidate its nonlife insurance businesses.

“The sale of PNBGen shares is consistent with the bank’s objective to exit the nonlife insurance business being a non-core undertaking. The proceeds of the transaction will be used for general corporate purposes,” the Tan-led lender said.

The share purchase agreement for the transaction was likewise signed on Dec. 29.

The transaction involves PNB and PNB Holdings Corp. which hold six million and 3.126 million common shares, respectively, in PNBGen. These shares will be sold at P166.93 apiece to ABIC.

The listed bank said in its filing that PNB Holdings received an initial payment worth P521.8 million on Dec. 29.

Meanwhile, PNB is set to receive a P100.16-million settlement on Jan. 20 and two P450.7-million payments on March 21, and June 21, respectively.

With a net income of P126.861 million in 2019, ABIC was the 10th top performer in the non-life insurance industry, based on the unaudited quarterly financial reports submitted to the IC.

PNBGen, meanwhile, ranked 13th in 2019 with a net income of P101.6 million.

Based on net premiums written, PNBGen ranked 24th (P623.89 million) in 2019 while the ABIC placed 28th (P473 million), based on separate data from the IC.

PNB saw its net income rise by four percent to P2.5 billion in the third quarter of 2020. Its assets grew 14% to P1.3 trillion as of end-September from P1.14 trillion at the end of 2019.

The Tan-led lender’s shares ended trading at P29 apiece on Monday, down by 1.19% or by 35 centavos from its previous close.

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