PNB to Sell 10% in Canara HSBC Life
Punjab National Bank (PNB) has announced its decision to divest 10% of its stake in Canara HSBC Life Insurance Company (Canara HSBC Life). This move is part of the bank’s efforts to improve its capital adequacy ratio and streamline its non-core assets. PNB currently holds a 30% stake in Canara HSBC Life, a joint venture between Canara Bank, HSBC Insurance Holdings Limited, and Exide Industries Limited. The sale of a 10% stake would reduce PNB’s ownership to 20%. The sale process is expected to be initiated shortly, with PNB exploring various options to divest its stake. The bank aims to fetch a fair value for its shares and has appointed an investment banker to manage the transaction. Canara HSBC Life is one of the leading private life insurance companies in India. It offers a wide range of life insurance products, including term plans, endowment policies, and unit-linked insurance plans (ULIPs). The company has a strong distribution network across the country. The sale of the 10% stake in Canara HSBC Life is a strategic move by PNB to enhance its financial position. The proceeds from the sale will be used to bolster the bank’s capital adequacy ratio, which is a key metric for assessing a bank’s financial health. PNB has been actively exploring opportunities to divest non-core assets and improve its financial performance. The bank recently sold its stake in PNB Housing Finance Limited and is also looking to sell its stake in PNB MetLife India Insurance Company. The sale of the 10% stake in Canara HSBC Life is expected to have a limited impact on the insurance company’s operations. Canara Bank and HSBC Insurance Holdings Limited will continue to be the majority shareholders, ensuring continuity and stability for the business. The insurance sector in India is growing rapidly, driven by rising awareness about financial planning and the need for protection. The sale of the 10% stake in Canara HSBC Life is a testament to the attractiveness of the insurance market and the potential for growth in the sector.
Punjab National Bank to Sell 10% Stake in Canara HSBC Life Insurance
New Delhi, June 21, 2023:
Punjab National Bank (PNB) has announced its intention to sell a 10% stake in its joint venture life insurance company, Canara HSBC Life Insurance. Canara HSBC Life Insurance is a joint venture between PNB (51%), Canara Bank (26%), and HSBC Insurance (Asia Pacific) Holdings (23%). The company has a pan-India presence with over 100 branches and a wide range of insurance products. According to PNB, the sale of the stake is part of its strategy to unlock value and focus on its core banking operations. The bank expects to raise around Rs. 1,500 crore from the transaction. Sources indicate that several insurance companies, including HDFC Life, ICICI Prudential Life, and Max Life, have expressed interest in acquiring the stake. The sale process is expected to begin soon, and the transaction is likely to be completed by the end of the financial year. The sale of the stake is not expected to have any material impact on Canara HSBC Life Insurance’s operations or its commitment to its customers. The company will continue to operate as a joint venture between Canara Bank and HSBC, with PNB exiting as a shareholder.