×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Prudential says looking to lift India JV stake

Prudential says looking to lift India JV stake
Comment E-mail Print Share
First Published: Thu, Sep 15 2011. 04 23 PM IST
Updated: Thu, Sep 15 2011. 04 23 PM IST
Dalian: Prudential Plc, Britain’s biggest insurer, hopes that India’s upcoming budget will include legislation that allows it to increase its 26% stake in its joint venture (JV) with the country’s number two lender ICICI Bank Ltd.
Prudential was also confident that it would be able to sustain premium growth in China through its partnership with CITIC Bank, said Barry Stowe, the insurer’s Asia chief executive.
“The Indian national budget is coming up soon, and there is talk now that foreign insurers may be allowed to raise their stakes,” Stowe said during an interview on the sidelines of the World Economic Forum in the northeastern Chinese city of Dalian. “We’re hopeful that will happen.”
Prudential owns just over a quarter of its ICICI-Prudential insurance joint venture with ICICI Bank, the maximum allowed under Indian law. In China, it owns half of the CITIC-Prudential joint venture it runs with CITIC Bank.
The financial sector in Asia may also soon see a shake-up with some foreign companies choosing to exit instead of continuing to bleed, Stowe said. “Lots of foreign companies have come to Asia, but very few have executed well,” he said. “Some of them are acknowledging their failure and may choose to exit.”
Many banks and insurers have come under cost pressures in Asia, with a growing number of employers chasing the same pool of experienced financial talent and pushing up salaries in the process.
HSBC Holdings Plc has started seeking interested parties for its non-life insurance business globally, people familiar with the matter said last week, while Aviva Plc has said it wants to focus on its 12 most profitable markets.
Prudential also intended to keep its listings in Singapore and Hong Kong, aiming to boost liquidity and investor interest in the stock in Asia, Stowe said. Turnover in Hong Kong and Singapore is a fraction of that for its main London listing, placing a question mark over the long-term viability of the two listings.
“This is not something that can be achieved in a year or two,” Stowe said. “We looked at others that have done it before us, and it has taken them up to 10 years. This something we intend to keep for a long time.”
Comment E-mail Print Share
First Published: Thu, Sep 15 2011. 04 23 PM IST