Pnbs Risk Foray Once Again A Copper

Punjab National Bank's (PNB) plans to foray into the insurance sector has once again failed. This time round it is because its proposed foreign partner, Zurich Financial Services, has decided against proceeding with insurance joint ventures in India.

PNB today informed the Bombay Stock Exchange (BSE) that Zurich has apprised the bank of its decision to defer further investment in India, and that it will not proceed with the insurance joint ventures as envisaged earlier.

This follows closely on the heels of the Switzerland-based financial group reporting its first ever loss of $2 billion, just months after its CEO Rolf Hueppi was replaced by James Schiro. The new CEO has reportedly stated that the company will exit from businesses and markets that do not give it a 12 per cent return.

 

Global insurance majors are seen to be in the soup, having posted huge losses and seeing their stock prices fall in the international markets.

This is the fourth time round that PNB's plans to foray into the insurance sector have gone for a toss. The bank had initially zeroed in for a tie-up with Zurich Financial and three other state-run banks -- Bank of Baroda, Allahabad Bank and Vijaya Bank -- but the deal failed to go through.

Later PNB tried to rope in the Hero group, which pulled out of the venture last year. Partnership with the Delhi-based DCM Shriram was then sought, but broke off following the central bank's rejection of the proposal.

All along the proposed foreign entity Zurich Financial continued to be interested in the joint venture till a new CEO was appointed.