Photo: Duc Anh
Bank a 50/50 partner in VietinBank Aviva Life Insurance Company.
The government has given permission to the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank, HSX stock code CTG) to transfer its holding in the VietinBank Aviva Life Insurance Company to Aviva International Holdings Ltd (AIH).
The share price is yet to be announced. VietinBank contributed VND400 billion ($17.64 million) when the company was set up but by the end of 2016 the net value of its investment, by the equity method, was only VND183.8 billion ($8.1 million), while the value at the end of 2015 was approximately VND318 billion ($14 million).
The equity method reflects the ownership of the investor in the business result of the investee. It was not exceptional for VietinBank Aviva to report losses last year.
VietinBank Aviva has charter capital of VND800 billion ($35.3 million) and was set up in 2011 with a 50-year lifespan. It is a joint venture between VietinBank and Avia International Holdings Ltd (established in the UK), with each side holding 50 per cent.
The company is a major player in the life insurance field. According to estimates by the National Insurance Supervision Bureau, it ranks tenth in premium revenue and has a market share of 1.52 per cent.
Shareholder structures in life insurance companies have seen many fluctuations in recent years. In the PVI Sunlife Company, a Sunlife Group partner completed the acquisition of the entire capital from PVI after two transfers. The deal helped PVI record a large profit and led it to withdraw from the life insurance business after three years of involvement.