Local lender DBS Bank and Canadian insurer Manulife Financial Asia Limited on Wednesday announced that they have signed a closely-watched 15-year regional distribution deal covering four mutually significant markets, namely Singapore, Hong Kong, China and Indonesia.
The agreement will take effect on January 1, 2016.
Under the deal, there will be an initial payment by Manulife to DBS of US$1.2 billion, which Manulife intends to fund with internal resources. This payment will be amortised by both parties over 15 years.
"There will also be ongoing, variable payments, which are based on the success of the partnership, and Manulife expects the agreement to be accretive to core earnings per share in 2017. The initial payment for this regional agreement is expected to reduce Manulife's regulatory capital ratio by 10 points on or before January 1, 2016," said the two.
The two companies said in a filing on the Singapore Exchange that the new exclusive life bancassurance partnership will combine DBS' Asian banking franchise with the insurance and wealth management expertise of Manulife.
In the four markets, DBS' six million retail, wealth and small and medium enterprise (SME) customer base will gain access to Manulife's suite of life and health insurance solutions, through the bank's network of over 200 branches and its sales force of over 2,000 professionals, as well as via its internet and mobile banking platforms, they said.