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| Suitors line up to buy IDBI home loan arm | |
| Press Trust Of India / Mumbai November 09, 2008, 0:37 IST | |
Bank to shortlist buyer soon; sale aimed at consolidating mortgage finance business.
IDBI Bank has received 10 to 12 proposals from potential buyers of its wholly-owned subsidiary IDBI Homefinance (IHFL), a top bank executive said.
“Ten to 12 parties have approached us and we are evaluating the proposals. We will shortlist (the buyer) in the next few months,” IDBI Bank Deputy Managing Director Jitender Balakrishnan told reporters on the sidelines of a seminar organised by Ficci-IBA here today. He, however, did not name the potential buyers.
The bank has decided to sell IHFL with a view to consolidating its home-loan finance business, which is currently being rolled out through both its own housing finance division and its Pune-based wholly-owned subsidiary.
However, with valuations under pressure in the wake of the current downturn in the financial markets, the lender may not get what it expects. This could delay the sale process by a few more months.
IDBI Bank took over the erstwhile Tata Home Finance in September 2003 and renamed it IHFL with a view to operating a separate unit for its home loans business.
IHFL currently has a home-loan portfolio of above Rs 2,700 crore and a presence in 18 centres in the country with 150 employees.
Though IDBI Bank had initially toyed with the idea of merging IHFL with itself, the bank abandoned it, owing to the challenges involved in integrating the two entities, especially on the human resources side, a bank source said.
IDBI Bank has targeted 18-20 per cent loan growth in this financial year, while its deposit base is expected to grow by 20-22 per cent during the same period, Balakrishnan said.
Non-performing assets (NPAs ) in the banking sector might go up in the coming months unless banks take prudential measures and are cautious in their lending, Balakrishnan said.
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