Thursday, December 5, 2013

HSBC not to exit insurance joint venture

One of the stakeholders in Canara HSBC Oriental Bank of Commerce Life Insurance Company, HSBC has decided not to exit its insurance joint venture with state-run Canara Bank and Oriental Bank of Commerce.

Earlier this year, HSBC had shown its intension to exit Indian insurance market by selling its stake in the JV. The two public sector banks Oriental Bank of Commerce (OBC) and Canara Bank had opposed the proposed deal, as they are annoyed with HSBC's decision to sell stake in its Indian life insurance joint venture without consulting them.

Canara HSBC Oriental Bank of Commerce Life Insurance Company was launched in 2008 as a joint venture, with Canara Bank and Oriental Bank of Commerce holding 51% and 23% stakes respectively, while HSBC Insurance (Asia Pacific) Holdings Ltd with 26% stake.

HSBC has officially said that it would be staying back. So, the joint venture is intact. Its shareholding also remains the same, said Mr. R K Dubey, Chairman and Managing Director of Canara Bank.

Shriram Group, Canada's Manulife Financial Corp and a few others had shown interest in buying HSBC's stake in around Rs 4,000 crore insurance joint venture. In the joint venture, HSBC's stake is worth about Rs 1,000 crore.

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