LIC plans to up stake in South Indian Bank

Insurance behemoth Life Insurance Corporation of India (LIC) is planning to acquire more shares in Thrissur-based private sector South Indian Bank (SIB). The corporation has already acquired 1.91 per cent in SIB in the past 10-12 months through open market purchase.

Sources at the bank said that LIC is showing keen interest in enhancing its stake holding in the bank and for having strong business relations with the bank.

According to the present banking regulations, an insurance company can have a maximum of 10 per cent holding in a private sector bank.

The corporation launched various insurance plans through selected SIB branches. A similar tie-up to market the LIC credit card and collecting insurance premium is also in the pipeline.

The bank had a marketing tie-up with ICICI Prudential, but ended this for having tie-up with LIC. Earlier, ICICI Bank had 11 per cent holding in SIB.

Meanwhile, SIB is planning to enhance its presence in North India. The Delhi region will have 42 branches, among them Delhi city alone will have 30 branches. This week alone three branches at Faridabad, Najafgarh and Indrapuram have been opened. Punjabi Bagh and Malavya Nagar will have SIB branches by next month.

SIB Managing Director and CEO V A Joseph said the bank had set a target of Rs 36,000 crore of business in 2009-10.

The bank would open branches at Meerut, Agra, Kanpur, Shimla, Phagwara, Bhilai, Jashedpur and Shillong would be opened in the current year. In the last financial year, SIB had earned a net profit of Rs 194.75 crore, with a total business of Rs 30,237 crore.