EastWest gets BSP nod on P500 M insurance venture

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has cleared the P500-million equity infusion of EastWest Banking Corp. taipan Andrew Gotianun in a proposed joint venture with Belgium-based Ageas Insurance International NV.

EastWest Bank finance officer Aerol Paul Banal informed the Philippine Stock Exchange (PSE) the BSP has approved the bank’s initial equity investment amounting to P500 million in EastWest Ageas Life, subject to regulatory approval.

EastWest Bank entered into a 50-50 joint venture agreement with Ageas Insurance International last May.

Under the plan, EastWest Bank and EastWest Ageas Life would enter into a 20-year exclusive distribution agreement.

With the BSP approval, Banal said the joint venture would now have to wait for the green light from the Securities and Exchange Commission (SEC), as well as the Insurance Commission.

EastWest Bank president and CEO Tony Moncupa Jr. earlier said the bank intends to build up the premier bancassurance business in the Philippines by offering tailor-made insurance solutions to its clients.

“We have always viewed bancassurance as an integral part of our business model. We see it as a necessary ingredient to have complete product offerings for the financial services needs of our target market segments. Specifically, the consumer and middle market corporate segments,” he said.

He added the joint venture partnership would be mutually beneficial to EastWest Bank and Ageas.

“In Ageas, we are comfortable that we have a common set of objectives and aligned philosophy on how to conduct business and best serve our customers. For us in EW, alignment is most important. This is why we have always preferred a JV arrangement,” Moncupa said.

The insurance business will benefit from EastWest Bank’s fast growing customer base. With more than 400 branch stores, the bank has the 7th largest distribution network amongst banks in the Philippines.

On the other hand, Ageas would contribute its proven Bancassurance skills and best practices from its successful businesses in Asia and Europe.