Fairfax Financial (FFH) was declared the strategic buyer for a 61% stake in IDBI Bank for US$5.6B, contributing its interest in Go Digit Insurance and IIFL Capital (~US$3B total) to help fund the deal…

… and create value for all parties, as the two entities get access to IDBI’s distribution. At its core, the transaction is a bet on India - which has seen growth in GDP per capita accelerate in recent decades…

… with plenty of upside as the economy develops (5% of Canada’s GDP per capita today). Moreover, IDBI can also benefit from credit market expansion…

… with India’s credit-to-GDP ratio sitting at half of Canada’s today (arguably too high). In combination with its recent US$9B Boots deal, we expect these tailwinds will result in increased contribution from associates…

… which supports Fairfax’s $1B+ run-rate outlook…

❝

For the last three years, we have said we can see a strong base of operating income now running at 5 billion on a consolidated basis and we continue to see that for the next three years to four years… This consists of interest in dividend income of CAD 2.5 billion plus. Underwriting profit of a CAD 1.5 billion and share of profits of associates of CAD 1 billion plus as well.

Peter Clarke (President & Chief Operating Officer) - 2026 AGM

… and could represent long-term valuation upside, if the company’s successful track record of bank deals is any indication of what’s to come.

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