Uob To Sell Life Assurance Arm To Prudential

[churchill]

)--Singapore's United Overseas Bank Ltd. (U11.SG) Wednesday said it plans to sell its life assurance unit, UOB Life, to Prudential Singapore Holdings Pte. Ltd., a subsidiary of Prudential PLC (PUK), for S$428 million.

Completion of the sale is scheduled for Jan. 31.

As part of the transaction, UOB's bancassurance operations in Singapore, Indonesia and Thailand will distribute Prudential's life, accident and health insurance products for at least 12 years. UOB has 414 branches in the three markets.

UOB said the sale is not expected to impact the bank's financial position for the year ending Dec. 31, 2010.

UOB also said the unaudited net tangible asset value of UOB Life at Sept. 30 was S$244 million and that the book value of UOB's investment in the unit at Sept. 30 was S$343 million.

"With the sale and the bancassurance arrangements with the Prudential Group, the UOB Group would be able to leverage on its core banking franchise and strong distribution network to build a successful bancassurance platform across the region," UOB said in a statement.

The bank's deputy chairman and chief executive, Wee Ee Cheong, said "the tie-up allows us to leverage our distribution strength and harness the manufacturing expertise of a leading life insurer, to jointly accelerate the growth of our bancassurance business regionally."

Prudential Group Chief Executive Tidjane Thiam said the transactions strengthens the group's presence in Asia.

"This bancassurance partnership offers us significant new profitable growth opportunities in Singapore and Indonesia, and substantially increases our scale in Thailand, a key market in the region," Thiam said.

A trading halt on UOB's shares was lifted at 0800 GMT. At 0826 GMT, the shares were up 0.9% at S$19.80 while the broader benchmark Straits Times Index was up 0.3%.

HSBC is UOB's adviser on the transaction.

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