The State Bank of India (SBI) on Wednesday said that it has received the board's nod to divest its stake in the card and payment services arm through the IPO route. The largest public sector bank currently holds 74 percent stake in SBI Cards. "The Executive Committee of Central Board of the Bank at its meeting held today has given in-principle approval to explore the possibility of diluting SBI’s stake in SBI Cards & Payment Services Private Limited, a subsidiary company through IPO route at an opportune time, subject to the approval of RBI and other regulatory agencies in this regard," SBI said in an exchange filing.
SBI Cards claims to be second largest credit card issuer after HDFC Bank. "Further, specific disclosures in terms of Regulation 30 of Listing Regulations read with SEBI Circular dated September 9, 2015 and in terms of SEBI’s ‘Comprehensive guidelines on "Offer for Sale" (OFS) of Shares by Promoters through the Stock Exchange Mechanism’ dated July 18, 2012 as amended from time to time, will be given once the same is finalized by the Bank", SBI also said in the same regulatory filing.
Meanwhile, the SBI reported a net profit of Rs 2,312 crore for the June quarter of 2019-20 (Q1FY20) on the back of healthy growth in advances and stable asset quality. The bank had reported a net loss of Rs 4,875.9 crore in the corresponding quarter of the previous fiscal (Q1FY19) and a PAT of Rs 838.4 in the March 2019 quarter (Q4FY19). The bank's asset quality improved with gross non-performing assets (GNPA) at Rs 1.68 lakh crore, down 21 per cent, from Rs 2.13 lakh crore reported in Q1FY19.