South Indian Bank (SIB) wants to acquire a bank to double its loan assets from Rs 7,360 crore. The Kerala-based old private sector bank announced its intention to take the plunge in the acquisition game today.The bank's board, which met on Septmeber 30, has set up a four-member team to look for acquisitions."The reason behind looking at inorganic route (merger and acquisition) is to grow faster if there is synergy. The board has formed a four-member team to identify and talk to prospective banking entities by the end of March 2007," V A Joseph, chairman of the Thrissur-based private sector bank, said.SIB has a net worth of Rs 690 crore, and had a capital adequacy ratio of 12.04% as on June 30, 2006. SIB's strong capital base would come in handy in acquiring another small-sized bank with some of them failing to meet the regulatory requirement of minimum net worth of Rs 300 crore so far, Joseph said.The banks that did not adhere to the minimum net worth requirement include City Union Bank (Rs 286 crore), Catholic Syrian (Rs 216 crore), Dhanalakshmi Bank (Rs 134 crore), Ratnakar Bank (Rs 54 crore) and Sangli Bank (Rs 84 crore).SIB would look at banks with assets size of up to Rs 8,000 crore, and there is no preference for any bank from a specific region, Joseph said. This criterion also puts Tamilnad Mercantile Bank on SIB's radar, a banking analyst said.SIB shares ended almost flat at Rs 69.60 on the Bombay Stock Exchange on Tuesday. Since the beginning of 2006, four small private sector banks have either gone in for negotiated mergers or were placed under a moratorium and subsequently merged with bigger banks. The latest was the merger of United Western Bank with IDBI. Ganesh Bank of Kurunwad was taken over by Federal Bank, Lord Krishna Bank was acquired by Centurion Bank of Punjab and Bharat Overseas Bank was merged with Indian Overseas Bank.
