In a significant move to expand its footprint beyond core banking, Central Bank of India on Thursday announced that the public sector lender has acquired an equity stake of 24.91 per cent in Future Generali India Insurance Company Limited (FGIICL) for upto Rs 451 crore.
In a regulatory filing, the Bank said, “We wish to inform you that Central Bank of India has acquired equity stake of 24.91% of Future Generali India Insurance Company Limited (FGIICL) pursuant to receipt of Letter of Intent dated 20th August, 2024 under Regulation 29 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.”
Rationale of the acquisition
With this acquisition, the Bank is venturing into the insurance sector. FGIICL is an established player in its industry which, the Bank said, was available for acquisition at a reasonable valuation and is seen as a strategic bet given its existing market presence and operational capabilities.
Central Bank of India has already obtained approval from Competition Commission of India (CCI), Reserve Bank of India (RBI) and Insurance Regulatory and Development Authority of India (IRDAI).
Future Generali India Insurance Company Limited was established in 2006 and operates across more than 150 locations in India. The company provides a range of insurance products, including retail, commercial, personal, and rural solutions, catering to both individuals and businesses to support risk management and protection needs. Generali holds the majority ownership in the company, with a 74 per cent stake.
Earlier in April, Central Bank of India had released its fiscal fourth quarter earnings report with a 28 per cent year-on-year rise in net profit to Rs 1,033.6 crore. Net interest income (NII) dropped by 4 per cent year-on-year to Rs 3,399 crore from Rs 3,541 crore. However, total income, including interest and non-interest income, improved by 7.57 per cent to Rs 10,433 crore.
Shares of Central Bank of India were up 0.37 per cent at a trading price of Rs 40.39.