PNB leaves Canara HSBC Oriental Bank Life
Punjab National Bank (PNB), the country’s second largest public sector bank, intends to divest its stake in Canara HSBC OBC Life Insurance Co Ltd, a life insurer that began its journey in 2008.
After the merger with the Oriental Bank of Commerce (OBC) from April 1 of last year, PNB had become promoter-shareholder, with 23% of the capital of Canara HSBC OBC Life Insurance.
While Canara Bank holds 51% of the capital, HSBC Insurance (Asia Pacific) Holdings holds 26% of the capital of the life insurer, which is now an associated company of PNB.
PNB will sell its stake in the associated company Canara HSBC OBC Life Insurance at an “opportune time, depending on market conditions and available options,” the bank said in a regulatory filing on the stock exchanges.
The plan complies with the insurance regulator IRDAI’s standard that a commercial bank must not hold more than 10% of the shares in two life insurance companies at the same time, sources said.
After the OBC merger, PNB held a significant stake in two life insurance companies – PNB MetLife Insurance (30% stake) and Canara HSBC OBC Life (23% stake).
Canara HSBC Oriental Bank of Insurance Life Insurance was established as a tripartite joint venture between Canara Bank, HSBC and OBC and started operations in June 2008. It has paid-in capital of ₹ 950 crore and assets under management of ₹ 20,586 crore. The life insurer offers around 22 products for individuals and 7 products for the Group. Until the end of December of last year, the life insurer had sold 11.72 lakh policies.
Last year, in April, shortly after the merger with OBC, PNB Managing Director Ch SS Mallikarjuna Rao said Activity area that PNB was not seeking to exit Canara HSBC Oriental Bank of Commerce Life Insurance and would continue to hold its stake in PNB MetLife Insurance and Canara HSBC OBC Life for the next few years.