Axis Bank gains on signing JV pact for Max Life Insurance

Axis Bank rose 3.64% to Rs 442.85 after the bank and Max Financial Services on Tuesday announced the signing of definitive agreements to become joint venture partners in Max Life Insurance Company.

Axis Bank and Max Financial Services (MFS) announced the signing definitive agreements to become joint venture partners in Max Life Insurance Company (Max Life). Axis Bank will hold 30% stake in Max Life post transaction closure. The development will result in a mutually beneficial and enduring relationship between Axis Bank and Max Life and bring the stability of a long term partnership to India's fourth largest private life insurance franchise. The joint venture arrangement will significantly improve Max Life's competitive position vis a visits competitors, including the other large bank owned private life insurers.

Max Financial Services presently holds a 72.5% stake in Max Life and Mitsui Sumitomo Insurance (MSI) owns 25.5% stake. Axis Bank also has a minor stake in the life insurer.

Post completion of the series of transactions, Max Life will become a 70:30 joint-venture between Max Financial Services and Axis Bank. The proposed transactions are subject to approval of requisite corporate and regulatory authorities.

Announcing the transaction, Amitabh Chaudhry, MD and CEO, Axis Bank, said, "We continue to believe in the long term prospects of India's under-penetrated life insurance space, current environment notwithstanding. We see this joint venture creating immense value for our stakeholders given our long standing, high performing partnership with Max Life. We believe this transaction will allow us to deepen our working relationship leading to better integrated teams and infrastructure and a superior alignment in our approach."

Axis Bank will announce Q4 earnings today. On a standalone basis, Axis Bank's net profit rose 4.5% to Rs 1,757 crore on a 7.5% jump in total income to Rs 19,494.87 crore in Q3 December 2019 over Q3 December 2018.

Axis Bank is the third largest private sector bank in India. The bank offers the entire spectrum of services to customer segments covering large and mid-corporates, SME, agriculture and retail businesses. It had 4,415 domestic branches (including extension counters) and 12,173 ATMs across the country as on 31 December 2019.

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