BoI may sell stake in subsidiaries to raise capital to deal with bad loans

BoI plans to sell stake in subsidiaries to raise capital

Latest News – Saddled with bad loans, Bank of India (BoI) 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,” BoI Executive Director N Damodaran told PTI.

He said, however, 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 financial year (FY),” he said.

The bank’s gross non-performing assets (NPAs) or bad loans were restricted to 13.22 per cent of the gross advances at the end of March 2017, marginally higher than 13.07 per cent a year ago.

Net NPAs, however, declined to 6.90 per cent of the net advances at the end of the last FY, as against 7.79 per cent a year earlier.

In FY17, the bank reported a net loss of Rs 1,558 crore as against a net loss of Rs 6,089 crore in FY16. It 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 per cent 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 (Read More)

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