Federal Bank on Monday announced a slew of measures to widen its portfolio. It is planning to enter wealth management and buying a stake in an asset management company (AMC). | |
| The bank said it was looking for mergers and acquisitions opportunities. It is also planning a joint venture in West Asia to look after its business in the region. |
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| The company, which had acquired Ganesh Bank in September 2006, said it was looking to take over banks in Kerala and Tamil Nadu, but did not give details. |
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| "Unless you have the size, you can not survive. So mergers & acquisitions are necessary for us," Federal Bank's Chairman and CEO M Venugopalan said. |
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| Ganesh Bank's net worth was minus Rs 3.05 crore and was amalgamated with Federal Bank through a scheme that did not involve any payments to Ganesh Bank shareholders. |
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| Federal Bank had earlier signed an MoU with the Industrial Development Bank of India and the Netherlands-based Fortis Insurance International to set up a life insurance company. |
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| Venugopalan said an application had been sent to the Insurance Regulatory & Development Authority, and the company, which would be called IDBI Fortis, would be launched in the next two-three months. IDBI will hold 48 per cent stake in the joint venture and Fortis and Federal Bank 26 per cent each. |
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| Venugopalan said they would enter wealth management within the next 3-6 months and although they were looking for a stake in an AMC, they had not identified any partner. He said the JV in West Asia would be in the form of an offshore bank. |
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| Federal Bank is also planning to open 18 more branches by March 2007, which will be located across the country. At present, the Kerala-based bank has 519 branches. |
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| "While expanding, we have to move to other states. Therefore, we are opening branches in states such as Rajasthan and Haryana," Venugopalan said. |
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| Federal Bank has raised Rs 200 crore through unsecured redeemable non-convertible subordinated Tier II bonds. It had issued 20 million shares through GDRs in January 2006 through which it raised Rs 349.99 crore. |
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| Federal Bank is expecting a total business (advances plus deposits) of over Rs 38,200 crore by March 2007. |
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