Money & Banking

To monetise non-core assets, Central Bank to sell investments in Cent Bank and Indo-Zambia Bank

K Ram Kumar / Surabhi Mumbai | Updated on November 04, 2019 Published on November 04, 2019

Central Bank of India is planning to sell its investments lock, stock and barrel in subsidiary Cent Bank Home Finance and joint venture Indo-Zambia Bank, as part of its move to monetise non-core assets by March-end 2020.

‘A work in progress’

The bank, which reported a net profit of ₹134 crore in the second quarter of FY2020 after posting 14 consecutive quarters of losses, is seriously looking at monetising its investment in the home finance company and the joint venture in Zambia, according to MD and CEO Pallav Mohapatra. “Discussions are on, valuations are being done, and I am keeping my fingers crossed to get the money by the end of the financial year. I do not have any amount in mind as valuations are on. It is work in progress,” explained Mohapatra in an interaction with BusinessLine.

Central Bank of India wants to divest its 20 per cent stake in Indo-Zambia Bank to the other two Indian joint venture partners, who each hold 20 per cent stake. The Government of Zambia holds 40 per cent stake in the bank. “We will be exiting Cent Home Finance. In the case of Indo-Zambia Bank, our Indian partners will most probably continue. We want to exit, discussions are on. The preference will be that other two Indian JV partners take over from us,” said Mohapatra.

Central Bank of India will not divest its stake in subsidiary, Centbank Financial Services. This company essentially provides trusteeship services, including debenture/security trustee, executor trustee, and manages charitable trusts.

As of March-end 2019, Cent Bank Home Finance’s advances and deposits of stood at ₹1271 crore and ₹482 crore, respectively. The net profit of the company stood at ₹16.28 crore for the financial year 2018-19 against ₹16.84 crore in the previous year.

According to Central Bank of India’s latest annual report, Indo-Zambia Bank’s deposits increased by 24.21 per cent and advances by 34 per cent in calendar year 2018 over the previous year. The bank made a net profit of Kwacha 139.76 million (₹80.65 crore) for the calendar year 2018.

Published on November 04, 2019
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