ICICI Bank on Friday said it has sold 3.96 percent stake in insurance arm ICICI Lombard General Insurance Company Ltd for Rs 22.50 billion (Rs 2,250 crore).
The bank has divested 18,000,000 equity shares of face value of Rs 10 each of ICICI Lombard General Insurance Company Limited, representing 3.96 percent of its equity share capital at March 31, it said in a notification to exchanges.
ICICI Bank, while announcing its results for the quarter ended March 31, 2020 on May 9, 2020, had stated that the bank would look at further strengthening the balance sheet as opportunities arise.
“In line with this intent and pursuant to approval granted by the Board, the Bank has today divested 18,000,000 equity shares of face value of Rs. 10 each of ICICI Lombard General Insurance Company Limited, representing 3.96% of its equity share capital at March 31, 2020, on the stock exchange for an approximate total consideration of Rs. 22.50 billion,” the bank said.
Following this, the Bank’s shareholding in ICICI Lombard General Insurance Company Limited now stands at approximately 51.9 percent.
In Q4, ICICI Lombard General Insurance posted a 23.8 percent year-on-year rise in its net profit at Rs 281.93 crore due to a reduction in underwriting losses. The underwriting loss reduced to Rs 29.42 crore in Q4FY20 as compared to Rs 49.70 crore in the year-ago period.
According to Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance said that the reduction in underwriting losses was due to a conscious call to not write crop business and also due to pricing improvements in segments like fire insurance. ICICI Lombard took an impairment hit of Rs 120 crore in Q4. The mark-to-market losses in the equity book is Rs 550 crore at end of March 31, 2020. However, the overall net investment income rose by 33.6 percent YoY to Rs 418.37 crore in Q4FY20.
Gross direct premium income (GDPI) of the company stood at Rs 3,181 crore for Q4 compared to Rs 3,485 crore a year ago. Excluding crop insurance, GDPI rose by 2.9 percent YoY to Rs 3,244 crore.
News source: moneycontrol