LIC-owned IDBI Bank to sell mutual fund business

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IDBI Bank Ltd has initiated the process of selling its mutual fund business, Mint reported.

“IDBI Bank has appointed ICICI Securities Ltd to advise it on a 100% sale of its mutual fund business, IDBI Asset Management Ltd and IDBI MF Trustee Co. Ltd. The bank has invited expression of interest from buyers by 10 June,” a senior official of the bank told Mint.

“Mutual fund businesses are generally valued at 4-5% of their assets under management . So, the sale of the business could fetch the bank 360-450 crore,” he added.

The Life Insurance Corporation of India has 51% stake in the IDBI Bank which has announced to sell its mutual fund business.

The mutual fund business of the debt-laden lender has assets under management (AUM) of more than 9,000 crore, an anonymous source told Mint.

Apart from the mutual fund business, the IDBI Bank also wants to sell its stake in IDBI Federal Life Insurance Co. Ltd, a three-way joint venture between IDBI Bank, Federal Bank and Belgian insurer Ageas.

IDBI holds 48% stake, while Federal Bank and Ageas own 26% each.

However, the bank’s gross non-performing assets (NPAs) improved slightly to 29.67% in the third quarter from 31.78% in the July-September period. Whereas, its net NPAs stood at 14% against 17.30% in the preceding quarter.

In January, IDBI Bank had told the exchanges that its board has approved a proposal to resume the process of divesting its stake in the life insurance business.

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