Bank of Baroda said to consider cutting insurance firm stake
Mumbai: Bank of Baroda, India’s third-largest state-run bank by assets, is considering a sale of some of the minority stakes it holds in its insurance and asset-management ventures, according to people familiar with the matter.
The Mumbai-based bank is seeking to pare its 44% stake in IndiaFirst Life Insurance Co. and the 49% stake in Baroda Pioneer Asset Management Co., the people said, asking not to be identified as the information isn’t public. They didn’t give a time frame for executing the sales.
A Bank of Baroda spokesman didn’t immediately respond to emails and phone calls seeking comment.
Any sale would help the 109-year-old bank helmed by chief executive officer (CEO) P.S. Jayakumar free up capital to bolster its balance sheet. The lender would be joining larger rivals like State Bank of India (SBI) and ICICI Bank Ltd in divesting stakes in units or ventures to buttress themselves against mounting bad debt in India.
Andhra Bank owns 30% of IndiaFirst, which was launched in 2010, with the UK’s Legal & General Group Plc holding the remaining 26%. Baroda Pioneer is a venture set up in 2008 between Bank of Baroda and Pioneer Investments.