Allahabad Bank might partially exit Universal Sompo General Insurance Company, a joint venture (JV) between public sector banks, Allahabad Bank and Indian Overseas Bank (IOB), along with Karnataka Bank, Dabur Investment Corporation, and Sompo Japan Nipponkoa Insurance (a wholly owned subsidiary of Japan’s Sompo Holdings). Earlier, the bank was also vetting the option of a full exit from the insurance venture.
Also, Allahabad Bank is seeking a fresh valuation of the company after the insurance firm posted positive results for the fourth quarter (Q4) of 2018-19 (FY19), said sources.
Universal Sompo posted a net profit of Rs 108 crore in Q4FY19. Its combined ratio, a measure of an insurance firm’s profitability, stood at 55.17 percent at the end of Q4FY19.
At present, Allahabad Bank holds 28.52 percent, while IOB holds 18.06 percent stake in the company. Karnataka Bank earlier sold a part of its stake to Dabur and Sompo Japan Nipponkoa. After the deal, Karnataka Bank’s stake in the JV reduced to 6 percent, from the earlier 14.26 percent.
Sompo Japan’s stake increased to 34.61 percent, from the earlier 28.42 percent. Similarly, Dabur Investment Corporation’s stake also increased to 12.81 percent, from the earlier 10.74 percent.
Under the earlier deal, Karnataka Bank sold over 30 million shares for Rs 55 per share to Sompo and Dabur.