Industrial Development Bank of India will invest Rs1 billion in its new bond dealing subsidiary IDBI Gilts and hopes to enter the life insurance business this year, an official said.
The state-run lender expects IDBI Gilts to take over corporate and government bond dealing from another subsidiary, IDBI Capital, by April, Deputy Managing Director O.V. Bundellu, told reporters on 21 March.
“We will invest Rs500 million initially in IDBI Gilts and take it up to Rs1 billion in next three to six months,” he said.
IDBI has also formed a joint venture with Federal Bank and Belgian-Dutch firm Fortis for life insurance. The firms, together, plan to invest Rs1.5 billion initially.
IDBI will hold 48% in the venture while Federal Bank and Fortis will have 26% each.
Bundellu said the bank expected a loan growth of 20%, despite the central bank’s monetary tightening, during 2006/07.
IDBI, which acquired ailing private lender United Western Bank last year, hoped to grow its deposit base by more than 30% in the year to March 2007, he said.
The bank’s loan portfolio grew by an annual 21% to Rs605 billion in the quarter to December 2006, while deposits were up by 72% at Rs376 billion during the same period.