New Delhi: Life Insurance Corporation (LIC) said on Monday that there is no plan to merge its subsidiary LIC Housing Finance Ltd (LICHFL) with any other entity. The statement came from LIC after some media reports suggested that the insurance company might expedite the process of merging LIC Housing Finance Ltd with IDBI Bank, its banking arm.
"There was absolutely no proposal to merge LICHFL with any other entity and all such rumours floating in the market are not based on facts," LIC said in a clarification.
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In a separate filing, IDBI Bank said that no such proposal has been discussed in its board meeting. Shares of LIC Housing Finance Ltd went down by more than 10 percent after reports of its merger with IDBI Bank emerged. IDBI shares also declined by 2.54 percent.
The news comes as IDBI Bank, in which LIC holds 51 percent stake, had widened its standalone net loss to Rs 5,763.04 crore in Q3 of FY2019-20 due to higher bad loans. The bank had posted a net loss of Rs 4,185.48 crore during the corresponding quarter of the previous fiscal year.
IDBI Bank saw an increase in its bad loans, with gross non-performing assets (NPAs) at 28.72 percent of the gross advances at the end of Q3 of FY2019-20, only a little lower than 29.67 percent the bank witnessed in the corresponding quarter of FY2018-19.
LIC Housing Finance posted a consolidated net profit of Rs 602.25 crore in the December quarter of FY2019-20, marginally lower than a year ago. The company had posted a net profit of Rs 607.29 crore during the same quarter of the previous financial year.
The net profit on standalone basis was Rs 597.53 crore during the December quarter of FY2019-20 which remained nearly flat on year-on-year basis.