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Bank of India bids adieu; looks to sell insurance JV stake, boost kitty by Rs 1,105 crore

FE Online

State-run Bank of India is looking to raise up to about Rs 1,105 crore by divesting its 25.05% stake in its insurance joint venture with Union Bank of India and Japan-based life insurance company Dai-ichi-Life Holdings.

In the joint venture Star Union Dai-ichi Life Insurance (SUD Life), Bank of India holds 28.05% stake and the other two companies Union Bank of India and Dai-ichi-Life-Holdings hold 25.10% and 45.94% respectively. SUD Life was established in 2009.

The Bank of India has floated a request for proposal for bids to divest around 6.48 crore shares at a floor price of Rs 170.50. The bids have to be submitted latest by April 12 and the last date for submitting an expression of interest (EoI) is April 29, the PSU bank informed stock exchanges on Friday.

Bank of India and Union Bank of India have sponsored select Regional Rural Banks, which provide SUD Life access to more than 1,950 branches which make life insurance products available in rural areas, according to the SUD Life website.

Earlier this year, Bank of India, along with other five state-run banks including Corporation Bank and Allahabad Bank came out of RBI s prompt corrective action framework after the government infused capital of worth Rs 1.06 lakh crore in financial year 2018-19. Under the PCA framework, RBI had put restrictions for branch expansion and big lendings among other things.

Bank of India reported a net loss of Rs 4,738 crore for the third quarter of financial year 2018-19 as against the loss of Rs 2,341 crore in 2017-18 as its bad loan provision doubled due to IL&FS crisis and the first 40 accounts referred by the RBI for the bankruptcy proceedings. However the banks operating profit increased to Rs 2,273 crore in October-December of FY19. The Bank of India s CET 1 ratio was 9.1% and its Basel III ratio was 12.1% During October-December.

Bank of India s shares were marginally down on Bombay Stock Exchange in Friday s trading.