Following IDBI net loss of Rs 3602, LIC to inject Rs 20,000
The public sector bank IDBI has continued to report losses which has widened to Rs. 3,602 Cr in the quarter ending September 2018. After the announcement of the result, the bank's CEO Rakesh Kumar said that Life Insurance Corporation (LIC) is set to infuse Rs 20,000 Cr into the bank, which will immediately improve the bank's capital adequacy ratio from to 16% from 6.22% at present. The percent might drop after the next quarter results.
The bank has a burden of bad loans on it. IDBI will receive the amount from the open offer in December as its majority stake is set to be taken over by insurance giant Life Insurance Corporation (LIC). Kumar said that LIC’s investment is awaiting approval from the competition commission, following which Sebi approval is expected.
The open offer, at Rs 61.73 per share, will close on December 14.
LIC has offered to acquire 204.15 crore equity shares, representing 26 percent of the fully paid-up equity capital of IDBI Bank.
IDBI Bank has posted a loss for the eight consecutive quarter.
In the midst of the transition, the bank reported a hefty loss of Rs 3260 crore in the second quarter ending September 2018 of the current financial year as bad loans continued to rise to 31 percent of its total loans.
In comparison, the loss a year ago stood at Rs 198 crore.