Bank of India (BoI) aims to raise over Rs 600 crore by selling stake in two subsidiaries-STCI Finance and Equifax Credit Information Services (ECIS) by September-end, the state-owned lender said after announcing its first-quarter results on July 30.
The bidding process for disinvestment in both the subsidiaries is on, said N Damodharan, Executive Director, BoI, adding that the sales are likely to be finalized in the July-September quarter.
In September 2018, BoI had floated Request for Proposal (RFP) inviting bids for the sale of a stake in STCI Finance, SIDBI and ECIS. The bank plans to fully exit these investments and has received two bids for STCI Finance. It holds 29.96 percent stake in STCI Finance.
BoI also plans to sell 25 percent of its stake in Star Union Dai-Ichi Life Insurance, the joint venture with Union Bank of India and Dai-Ichi Life, by October-December quarter. The RFP was floated in April 2019.
The bank, that exited the Prompt Corrective Action (PCA) framework in January, had realized Rs 227 crore via sale of non-core assets in the last financial year.
The stake sales will help the bank boost its capital adequacy ratio that stood at 14.35 percent as of June 30, compared with 14.19 percent at the end of March 2019.
As part of its measures to cut costs, the bank is undergoing rationalization of branches and Automated Teller Machines (ATMs). Last year, it closed 36 branches and 1269 ATMs. This year, BoI plans to close 15 branches and has already closed one international representative office.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
