IDBI Bank, in association with its majority stakeholder LIC, is working on a turnaround plan to boost profitability.
Among the immediate synergies identified include selling of LIC policies through the bank’s branches.
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IDBI also intends to manage cash and other premium LIC receipts through its branches.
The bank believes that the plan would enhance its operational efficiency while boosting its financial position.
This is said to result in wealth maximisation for its stakeholders.
For gains in the longer term, the two firms target a common investment strategy and rationalisation of common subsidiaries in the areas of mutual funds as well as life insurance.
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By GlobalDataA working group has been formed to implement the strategy.
The bank also appointed consultants to review its policies and processes.
“With this strategic alliance, the bank stands to gain immensely as it will be able to augment its retail business, thereby de-risking its business portfolio and ensuring increasing of other income/operating profit, margins and substantial increase in CASA,” the bank noted.
Meanwhile, IDBI intends to extend its managing director and CEO Rakesh Sharma’s tenure by an additional three years.
At the same time, the bank initiated the process of appointing two deputy managing directors through open competition.
LIC completed the acquisition of a 51% stake in debt-ridden lender IDBI earlier this year.
