The country's largest lender State Bank of India (SBI) will pare 2.1% of its stake in the subsidiary SBI Life Insurance via an offer for sale (OFS). The offer for sale will open on June 12 with a floor price of Rs 725 apiece, which is at 2.1% discount from the last close. SBI is expected to mop up almost $202 million via the share sale. In a statement to the exchanges, SBI said, its board has given a nod to divest 2.1% stake in SBI Life to achieve minimum public shareholding of 25% (remaining part of the bank's share for minimum public shareholding), through offer for sale. SBI Life is a joint venture between SBI and BNP Paribas Cardiff. At the end of March, 2020, SBI held a 57.60% stake in the life insurer and BNP Paribas Cardiff 5.20%, thereby taking the promoter stake to 62.80%. Public shareholding in SBI Life as of March, 2020, is 37.20%. SBI Life Insurance (SBI Life) reported an 8% growth in pre-tax profit for the March 2020 quarter to Rs 522 crore, compared to Rs 482 crore in the same period of the last financial year. Net profit jumped 16% to Rs 531 crore from Rs 458 crore, on account of lower tax provision. Annualised premium equivalent or APE (a common sales measure for life insurers) declined by about 13% year-on-year (YoY) to Rs 2,690 crore (11% up to Rs 10,740 crore for FY20). However, strong growth in high-margin protection products (up 27% in FY20 and 10% in Q4), sustained improvement in cost ratio, and good persistency (customers' stickiness) protected the insurer's operating profitability in Q4.
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