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| Federal may give nod for Catholic Syrian merger in 3 months |
| Press Trust Of India / New Delhi Nov 17, 2009, 00:21 IST |
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Kerala-based private sector lender Federal Bank is likely to approve the merger of the state-based Catholic Syrian Bank (CSB) within the next three months as it has already completed the due diligence.
Financial due diligence involving the process of ascertaining swap ratio and pricing was over, sources said.
The deal size would be around Rs 500 crore and the share swap ratio was expected to be 1:1, sources said.
It was expected that the Kochi-based Federal Bank board would approve the acquisition proposal of the Thrissur-based CSB within three months, although there had been opposition from the Syrian Catholic Church in the state on the proposed merger, sources said.
Once the respective board cleared the proposal, the banks would seek approvals from the Reserve Bank and Kerala High Court for the merger.
Federal Bank, which has over 600 branches across the country, posted a net profit of Rs 500.49 crore in the first half of the current fiscal.
The merger will further consolidate the position of Federal Bank as CSB has a branch network of 363, mainly concentrated in the South, with total business of Rs 10,000 crore.
Federal Bank, three years ago, had taken over Ganesh Bank of Kurundawad giving it presence in Maharashtra and Karnataka.
Federal Bank plans to add 35 branches during the remaining months of the current fiscal, and has set a target of Rs 1,00,000 crore business by 2011.
The bank’s gross business stood at Rs 60,000 crore, including Rs 38,000 crore in deposits as on September 30, 2009.
Currently, the unlisted CSB has 363 branches and one extension counter which includes NRI and service branches. It has set a target of 450 branches.
During 2008-09, the bank posted a net profit of Rs 37.18 crore on a total income of Rs 656.1 crore.
Capital adequacy ratio of the bank stood at 12.29 per cent at the end of March 2009.
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