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regular-article-logo Sunday, 14 July 2024

SBI to wait for subsidiaries to scale up operations before monetisation

'The subsidiaries, which would be eligible for this kind of route, would be essentially our SBI General and may be at some stage, SBI Payment Services, but as of now, we don’t have any such plan,' SBI chairman Dinesh Kumar Khara said

PTI New Delhi Published 17.06.24, 08:13 AM
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SBI chairman Dinesh Kumar Khara has said the lender would wait for its subsidiaries such as SBI General Insurance and SBI Payment to further scale up their operations before monetising them.

Scaling up of their operation will increase valuation and ensure better returns for the parent State Bank of India (SBI).

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When it comes to subsidiaries, their monetisation would be through the capital market, he said.

“The subsidiaries, which would be eligible for this kind of route, would be essentially our SBI General and may be at some stage, SBI Payment Services, but as of now, we don’t have any such plan,” he said.

“Maybe, we would like to scale them up a little more, and then we will think in terms of going to the capital market for monetising our holding in these companies. But not in the current financial year,” he added.

During the year ended on March 31, 2024, the bank infused additional capital of 489.67 crore in SBI General Insurance Company Ltd. The company has also allotted ESOP to employees and consequently, the bank’s stake has decreased from 69.95 per cent to 69.11 per cent.

SBI General Insurance reported a 30.4 per cent rise in net profit to 240 crore for the financial year ended March 2024. The non-life subsidiary of State Bank of India had recorded a net profit of 184 crore in the previous financial year.

SBI Payment Services Pvt Ltd, which is in the Merchant Acquiring Business, is 74 per cent owned by SBI, and the rest with Hitachi Payment Services.

SBI Payments is one of the largest acquirers in the country, with more than 33.10 lakh merchant payment acceptance touch points as of March 31, 2024.

However, the company’s net profit declined to 144.36 crore in 2023-24 against 159.34 crore in the previous year.

PTI

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