LIC emerges largest shareholder in Karnataka Bank

Life Insurance Corporation of India (LIC) has emerged as the largest shareholder in Mangalore-based private sector lender Karnataka Bank. As on March 6, LIC's stake in the bank stood at 5.21 per cent, according to a filing by the bank to the BSE.

LIC has increased the stake through open market acquisition of shares. At the end of December, its stake was 2.70 per cent.

LIC is one of the contenders for a new bank licence.

Other than LIC, Kotak Mahindra Investments and Religare Finvest are two other major shareholders in the bank, with stakes of 3.16 per cent and 2.79 per cent, respectively, as of December 31. Other shareholders include Macquarie Bank, Credit Suisse (Singapore) and Morgan Stanley Asia (Singapore).

There is speculation ICICI Bank and Kotak Mahindra Bank are in negotiations with Karnataka Bank for a possible acquisition. However, spokespersons of both the banks denied this. For the quarter ended December, Karnataka Bank reported an 11.1 per cent rise in net profit at Rs 80 crore, compared with Rs 72 crore in the year-ago period.

Its total income rose 19 per cent to Rs 1,051 crore, against Rs 883 crore in the year-ago period.