Bank Of India Plans Stake Sale In Subsidiaries To Raise Capital
Saddled with bad loans, Bank of India Ltd. is exploring the possibility of selling stake in some subsidiaries to unlock capital and turn the corner.
We sold stake in some of the subsidiaries and we are exploring opportunities to divest stake in some other non-core subsidiaries depending on right valuation.N Damodaran, Executive Director, Bank of India
Damodaran however, said that it would be difficult to give a timeline and share numbers. "We are focusing on certain non-core subsidiaries to divest with an aim to unlock capital...it will also help the bank get into the black this fiscal," he added.
The bank's gross non-performing assets (NPAs) or bad loans were restricted to 13.22 percent of the gross advances at the end of March, marginally higher than 13.07 percent a year ago.
Net NPAs however declined to 6.9 percent of the net advances at the end of last fiscal, as against 7.79 percent a year earlier.
For the fiscal ended March 2017, the bank reported a net loss of Rs 1,558 crore as against a net loss of Rs 6,089 crore during the corresponding period last year. the bank also narrowed its fourth quarter losses to Rs 1,046 crore from Rs 3,587 crore in the year-ago period.
Last year, the Mumbai-based lender sold 18 percent stake in Star Union Dai-ichi Life Insurance Company to its Japanese partner for Rs 540 crore, valuing the company at Rs 3,000 crore.
Following the transaction, Japan-based Dai-ichi Life Insurance Company's share went up to 44 percent and became the single largest promoter of the company. Bank of India's share came down to 30 percent while Union Bank of India retained its holding at 26 percent.
Earlier this year, the bank also sold its entire 5 percent stake in credit information firm TransUnion CIBIL Ltd. to TransUnion International Inc for Rs 190.62 crore.
The bank has various subsidiaries and associates including BOI AXA Investment Managers Pvt Ltd, Central Depository Services (India) Ltd, National Collateral Management Services Ltd, SME Rating Agency of India Ltd, BOI Shareholding Ltd, BOI Merchant Bankers Ltd, STCI Finance Limited and ASREC (India) Limited.
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