MOSL: FINANCIALS-Subsidiaries gaining strength-MF and cards businesses to be listed by FY20-Takeaways from SBI Subsidiaries Day
Financials: Subsidiaries gaining strength; MF and cards businesses to be listed by FY20; Takeaways from SBI Subsidiaries Day
We attended ‘SBI Subsidiaries Day’ organized by State Bank of India (SBIN), focusing on its key subsidiaries with highlights from the managements of the respective businesses. SBIN intends to list its cards and AMC businesses in FY20, and two of its 18 regional rural bank (RRB) subsidiaries. While SBI Life Insurance and SBI Cards are poised to take off on their next leg of growth, SBI General Insurance, after achieving breakeven in seven years of operations, is targeting underwriting breakeven within the next two years. SBI AMC, while continuing its leadership in B15 locations, is looking to capitalize on Amundi and SBI’s overseas presence to aggressively foray in ETF, AIF and offshore funds. SBI Capital Markets targets a leadership position in investment banking. Across businesses, the focus is on aggressive cross-selling to SBIN’s sizeable customer base of 420m, which presents a significant untapped market for these subsidiaries.
- SBI Life – focusing on margin improvement: SBI Life is focusing on increasing the share of its protection business to 10%, and improving margins with levers of opex control, digitization and fund management. The company aims to improve VNB (value of new business) margins by 1.5% every year.
- SBI Cards is incrementally focusing more on (a) cross-selling to SBIN’s 420m customer base, (b) the premium segment for business, (c) digitalization, and (d) merger of two entities to gain operating efficiencies.
- SBI AMC is focusing on (a) leadership in B15 locations, where it has 14% market share, (b) digitization, and (c) capitalizing on Amundi and SBI’s overseas presence to aggressively foray in ETF, AIF and offshore funds.
- SBI General Insurance, which has broken even in FY17 within seven years of operations, is looking to reduce its total combined ratio to achieve underwriting profits within the next two years.
State Bank of India provides a range of products and services to personal, commercial enterprises, large corporates, public bodies and institutional customers. Its segments include Treasury, which includes the entire investment portfolio and trading in foreign exchange contracts and derivative contracts; Corporate/Wholesale Banking, which comprises the lending activities of Corporate Accounts Group, Mid Corporate Accounts Group and Stressed Assets Management Group; Retail Banking, which comprises branches in National Banking Group, which primarily includes Personal Banking activities, including lending activities to corporate customers having banking relations with branches in the National Banking Group, and Other Banking Business, which includes the operations of all the Non-Banking Subsidiaries/Joint Ventures other than SBI Life Insurance Co. Ltd. and SBI General Insurance Co. Ltd. The Company had approximately 22,500 branches and 58,000 ATMs.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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