Mumbai: Private sector lender Axis Bank on Sunday said it is in talks with Max New York Life to acquire up to 5% stake in the latter.
“We are in talks with Max New York Life to pick up a less than five per cent stake. We are working on the valuation and the result of the talks will be known soon,” Axis Bank executive director and CFO S Sengupta told PTI in Mumbai.
The bank has tied up with Max New York Life to distribute the latter’s life insurance products beginning 1 April after ending its relationship with MetLife.
“Our distribution tie-up will be on, irrespective of whether we acquire a stake in Max New York Life or not,” Sengupta said.
Max New York Life is a joint venture between the US-based New York Life and Analjit Singh’s Max India.
A stake, even a small one, will indicate a strong relationship between Axis Bank and Max New York Life, besides creating value for the bank, Sengupta said, adding, “Max New York Life is growing rapidly and our investment will only increase in value.”
Ending the tie-up with MetLife will not affect existing customers as Axis Bank will continue to service them, Sengupta said.
When asked why the bank was moving away from MetLife to Max New York Life, Sengupta said its arrangement with MetLife was coming to an end and “as per existing regulations, we can have a tie-up with only one player and hence, we decided to go with Max New York Life.”
Axis Bank has no plans to turn into a manufacturer of insurance products and would continue to remain a distributor, he said.
“The market is crowded and we would be a late entrant. Besides, it would require substantial capital... it makes greater sense for us to remain a distributor,” he said.
In the general insurance segment as well, Axis Bank distributes the products of Bajaj Allianz.
When asked if the bank had any plans to offer health insurance products, Sengupta said the bank would evaluate pros and cons and then take a decision.
“When health insurance comes in, we will evaluate whether we want to be a manufacturer or remain just a distributor,” Sengupta said.