SBI Hopes to Sell Stakes in Insurance Units by Year-End
Mumbai: State-run State Bank of India on Tuesday said the valuation process for stake sales in its insurance units has begun and the transaction is likely to be completed by the end of the year.
SBI has two insurance subsidiaries - SBI Life Insurance and SBI General Insurance.
"The talks are going on. As you know both of our insurance partners have given letters saying they would like to dial up. The valuations are going on and we have to come to some kind of understanding and an agreement on those valuations before that dial up can happen," SBI chairperson Arundhati Bhattacharya told reporters here on Tuesday.
"There could be a chance of doing it this year itself," she added.
SBI has partnered with BNP Paribas Cardif to form a life insurance arm - SBI Life Insurance - in which the Indian bank holds 74 per cent.
In SBI General Insurance, it owns 74 per cent while Insurance Australia Group holds the remaining stake.
Ms Bhattacharya had earlier said that BNP Paribas Cardiff is interested in increasing its stake by 10 per cent to 36 per cent while IAG is keen on raising its stake to 49 per cent from the current 26 per cent.
"We want SBI Mutual Fund to come faster in the ranking. Currently, they are the sixth in the ranking and we want them to be among the first five before the close of this year," she said.
On factoring business, Ms Bhattacharya said she sees a wider scope for the segment in the country and is not planning to merge it with the bank.
SBI has a factoring business subsidiary - SBI Global Factors, which offers services like finance, credit protection against payment default of buyer and sales ledger management.
"We still believe factoring is something whose space in there but some of the Indian condition does not allow it. So, we are looking at ways and means to make them more relevant," she said.
"Specifically, what we have been doing for them is in respect of many of our stress assets, we are giving them management of the receivables book. A factor company does better management of the receivable book. We don't have any plans of rolling them into the main company."
