Canara Bank willing to acquire bank: Mahajan

The country's fourth largest public sector lender, Canara Bank, today said it is willing to acquire a bank in India to increase its size and presence.

"Consolidation is the only way to grow and we are willing to takeover (a bank)," Canara Bank Chairman and Managing Director A C Mahajan said.

As and when good opportunity will come, the bank would look at it, he said.

The statement assumes significance as Finance Minister Pranab Mukherjee last week had said, "the PSBs should look at consolidation as a serious option in order to reduce risk to financial stability and to face competition."

Besides State Bank of India and its six associate banks, there are 20 nationalised banks in the country. The larger ones include Punjab National Bank, Bank of Baroda, Union Bank of India and Bank of India.

The last consolidation event happened when SBI merged its smallest subsidiary State Bank of Saurashtra with itself in August 2008.

Pointing out that the initiative for merger should come from the management of the banks, Mukherjee had said, "Any consolidation initiative in the banking sector would be viewed positively and the government, as a majority shareholder, would continue to play a supportive role."

The government currently holds 73 per cent stake in the bank.

Talking about the credit growth, Mahajan said so far credit offtake is stable as the first quarter is generally a slack season for advances.The bank is aiming at the credit growth of 21-22 per cent during the current fiscal compared to 29 per cent in the last fiscal.

Net Interest Margin of the bank is likely to remain stable at 2.8 per cent during the current fiscal as well.Asked whether the bank is planning to raise capital through bonds, he said, "At the moment there is no plan."

As the capital adequacy of the bank is comfortable, there is no requirement of funds, he said, adding, as and when it would be required the bank will raise funds.