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PSU Banks Struggling as they Turn to Sell Insurance Holdings
May 25, 2017
Concerned with financial woes the state-run banks are planning to sell assets, especially those that don’t belong to their core businesses. This makes holdings in joint ventures in insurance sector a good option, but that’s where the problem lies.
Save for a few banks such as ICICI or SBI most lenders have remained marginal players in the insurance sector, and thus have a small market share.
Although there are nine bank-promoted companies in the insurance industry such as SBI Life, IDBI Federal Life Insurance, etc. only SBI Life, with a valuation of 46,000 crores, can be called a truly major player. However, it’s performing well so it doesn’t even need to sell assets. The problem is for other lenders who can’t turn to their insurance assets for raising capital.
