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    IDBI Bank close to selling 23% in insurance JV to Belgium’s Ageas

    Synopsis

    IDBI Bank is also looking to sell another 4% in the JV to local partner Federal Bank while it is yet to receive banking regulator’s clearance for the same.

    IDBIAgencies
    Ageas is the overseas partner in the life insurance joint venture.
    Kolkata: IDBI Bank has entered the final lap of selling its 23% stake in IDBI Federal Life Insurance Co to Belgium’s Ageas Insurance International. The deal is expected to be completed Thursday, people familiar with the matter said.

    The stake buy will help Ageas raise its stake in the insurance joint venture to 49% from 26%.

    IDBI Bank is also looking to sell another 4% in the JV to local partner Federal Bank while it is yet to receive banking regulator’s clearance for the same.

    At present, IDBI Bank holds 48% in the insurer while the Kerala-based private sector bank has 26% interest.

    The 27% stake sale would provide IDBI Bank Rs 595 crore, valuing the insurance company around Rs 2,200 crore. This deal would help the bank augment its capital. IDBI’s capital adequacy ratio as per Basel-III was 13.67% at the end of September.

    The bank, which is still under Reserve Bank of India’s prompt corrective action framework has just raised Rs 1,435 crore through qualified institutional placement.

    The Life Insurance Corporation of India owned bank was in talks to divest its insurance stake for the past couple of years. Last June, it announced a share purchase agreement with Ageas and Federal Bank.

    IDBI Federal Life’s first year premium collection between April and November was at Rs 319 crore, about 7.4% lower than it was in the same period last year. Its premium collection in November alone was Rs 52 crore compared with Rs 48 crore in the year ago period.

    The company earned a net profit of Rs 148 crore in 2019-20 against Rs 133 crore in the preceding fiscal.




    ( Originally published on Dec 30, 2020 )
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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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