ING tests waters to exit ING Vysya,approaches banks to consider deal

Earlier this year,ING Vysya had exited its life insurance business in India by selling 26 per cent stake in the venture to joint venture partner Exide for a sum of Rs 1,100 crore. At the time,ING in a statement had reiterated the deal was part of a broader strategy to divest its holdings in Asian insurance and investment management businesses.

The talks are at preliminary stages and banking sources say it is unclear whether promoters would finally exit. A lot will depend on whether ING can get a strong valuation for its stake in the banking venture.

Sources,however,add ING Vysya’s strong balancesheet and substantial branch network particularly in South India could help draw interest in the deal. Another factor that could help push through a possible deal at this stage may be the desire among Indian private banks to consolidate position ahead of new bank licences being issued.

ING Vysya reported a net profit of Rs 613 crore for the fiscal year,up 34 per cent. The bank has also been a strong performer on the operational front with net interest income growth of 27 per cent in FY’13 and a net interest margin of 3.52 per cent. Asset quality of ING Vysya’s book has also stabilised with gross NPAs at 1.76 per cent and net NPAs at 0.03 per cent as on March 31. FE