Fortis to keep Thai holding

Selling its stake in Muang Thai Life Assurance is not in the Belgian firm's plans as Asia is its main business base and the region holds good promise, president Sara Lamsam said in a hastily arranged press conference yesterday.

Moreover, the Lamsam family and Kasikornbank are Muang Thai Life Assurance's largest shareholders with a combined stake of 75 per cent and all its operations are run by Thais.

Fortis Insurance International is a sister company of the Belgian-Dutch Fortis Bank - rescued by the authorities this week - and the two companies separately operate their businesses, he said. Luxembourg now also holds a stake in the banking business.

"Fortis's businesses are banking and insurance services, each of which account for half of the group's total income. Insurance business remains healthy, while three national governments hold major stakes in the banking business," he said.

Muang Thai Insurance as of the end of August had more than 1 million policyholders, premiums of Bt11.2 billion and first-year premiums of Bt4.41 billion. Muang Thai Life's assets amounted to Bt54.61 billion, with investments totalling Bt50.36 billion and capital of Bt6.83 billion, 7.46 times above the requirement under Thai law and 234 per cent higher than European Union standards.

Of Muang Thai Life's investments, 84.32 per cent is in government and state-enterprise bonds plus corporate bonds rated A- at least - the law requires investment in bonds with a credit rating of BBB or above - 8.12 per cent is in equities and mutual funds, 7.56 per cent is in loans and only 0.8 per cent is invested overseas, Sara said.

The company has no investment in Fortis, he added. Fortis, the largest financial services firm in Belgium, received an ¤11.2-billion (Bt546 billion) rescue package from Belgium, the Netherlands and Luxembourg, which all bought into the group in return.