Fairfax Financial (FFH) investor relations material

Deal rationale and strategic fit

• Selected as strategic buyer for a 60.72% stake in IDBI Bank, a rare opportunity to own a majority stake in a bank in a fast-growing economy.

• Proposed contributions from Go Digit Life Insurance, Go Digit General Insurance and IIFL Capital would combine banking, insurance, investment banking and wealth management.

• Strategic thesis centers on expanding credit and financial-services access in India; IDBI Bank had been tracked since 2019, with work on the transaction beginning in October 2022.

Financial terms and conditions

• Proposed price of INR 81 per share; total consideration of ~INR 528.78 billion (~US$5.6 billion), a ~23% premium to June 30, 2026 book value under Indian Accounting Standards.

• Funding expected from holding-company cash, subsidiary dividends, existing credit sources, asset sales and contributions from Go Digit and IIFL Capital, estimated at approximately $3 billion.

• At June 30, holding-company cash and marketable securities totaled $2.3 billion, with another $2.3 billion in associates and consolidated non-insurance businesses; half of the Poseidon position was sold for ~$1.9 billion, and the Eurolife sale is expected to close in H2 2026 for ~$900 million.

• No long-term debt issuance is expected; leverage ratios are not expected to be significantly affected, and insurance-company portfolios are expected to provide minimal funding.

• IDBI Bank reported 27% capital adequacy, $7.5 billion net worth, 43.6% CASA deposits, a 0.2% net NPA ratio, 99% NPL provisioning and an 80% loan-to-deposit ratio.

Integration plans and timeline

• Rakesh Sharma is expected to continue leading IDBI Bank; N. S. Kannan is proposed as chairman, subject to RBI approval, and C. VR. Rajendran is planned for the leadership group and as an adviser.

• Go Digit and IIFL Capital are expected to retain their leadership and operating structures, with a decentralized approach rather than integration or rebranding.

• IDBI Bank is expected to use excess capital to acquire Go Digit shares for cash at market prices, supporting insurance distribution to bank customers.

• A decision on CSB Bank is required within two years; sale or merger options are being considered.