Allied Bank acquires 8% stake in New York Life

Allied Banking Corp. has acquired an eight-percent stake in US-based New York Life Insurance (Philippines) Inc. for P75 million.

This is expected to increase to 25 percent when the medium-sized commercial bank infuses an additional P225 million sometime within the year.

The move was designed mainly to allow both entities to practice bancassurance which is the selling of insurance policies within the premises of a bank.

Allied Bank president Reynaldo A. Maclang said their fee-based earnings account for 40 percent of total income. He expects earnings from the bancassurance to make substantial contributions next year.

Of the total 283 branches nationwide, New York Life products will be sold in 191 this year, and the rest of the branches by next year.

New York Life president and chief executive officer George B. May is looking to generate first- or new premiums this year amounting to P300 million of which nearly a third would be a direct result of its alliance with the Lucio Tan-controlled bank.

"We are a small player in the insurance industry that will grow big with the distribution network of our new partners," May said in a press briefing.

New York Life has nine branches nationwide and will add another five in the Visayas and Mindanao area by end 2003.