Punjab commercial bank (PNB), the country’s second-largest public sector bank, intends to divest its shareholding in Canara HSBC OBC life assurance Co Ltd, a life insurer that started its journey in 2008.
Post the amalgamation with Oriental Bank of Commerce (OBC) from April 1 last year, PNB had become promoter-shareholder, with a 23 percent stake in Canara HSBC OBC life assurance.
While Canara Bank has a 51 percent stake, HSBC Insurance (Asia Pacific) Holdings has a 26 percent stake within the life insurer, which is now an associate company of PNB.
PNB will divest stake within the associate company Canara HSBC OBC life assurance at an “appropriate time, counting on market conditions and available options”, said the bank during a regulatory filing to the stock exchanges.
This plan is in keeping with insurance regulator IRDAI’s norm that a billboard bank shouldn’t hold quite a 10 percent stake in two life assurance ventures at an equivalent time, said sources.
Post the OBC amalgamation, PNB had a significant shareholding in two life assurance ventures – PNB MetLife Insurance (30 percent stake) and Canara HSBC OBC Life (23 percent stake).
Canara HSBC Oriental Bank of Insurance life assurance was found out as a three-way venture between Canara Bank, HSBC, and OBC and had commenced operations in June 2008. it’s a paid-up capital of ₹950 crore and assets under management of ₹20,586 crores. The life insurer has about 22 products for people and 7 products for Group. Till December-end last year, the life insurer had sold 11.72 lakh policies.
Last year, in April, soon after the amalgamation with OBC, PNB director Ch SS Mallikarjuna Rao had told BusinessLine that PNB wasn’t watching an exit from Canara HSBC Oriental Bank of Commerce life assurance, and would continue with its shareholding in both PNB MetLife Insurance also as Canara HSBC OBC Life for subsequent few years.