Banks See Consolidation

The banking industry expects the beginning of a consolidation game in the private sector as a clutch of old and new private sector banks are in desperate need of capital and most foreign banks operating in India have been on the prowl. Analysts said Centurion, Global Trust, Bank of Punjab besides Vysya Bank would perhaps strike deals over the next few months.

ICICI has also initiated talks for a stake sale, which will take place in April after the institution merges with ICICI Bank.

"ABN Amro is interested in being part of the consolidation process because we desire a larger presence in India. This is an opportunity to grow through the inorganic route," said Romesh Sobti, CEO of ABN Amro's Indian operations.

 

ING Bank NA chief executive officer Atul Sahasrabuddhe said the acquisition game would be driven by the retail business. "Foreign banks need to identify the regions where they want to increase their presence and accordingly zero in on the targets," he pointed out.

Larger players like Citibank and Hongkong and Shanghai Banking Corporation have already announced plans for acquisitions as and when the regulator gives its nod. Standard Chartered Bank, which had recently picked up ANZ Grindlays' India business, may go slow on the acquisition front.

David Eldon, chairman, Hongkong and Shanghai Banking Corporation, had a few months ago said the group would keep its eyes open for acquisitions in India. Citibank chairman and CEO Victor Menezes, too, during his India visit last year had said the bank would look around for buyouts. The foreign entities now can do banking in India through their branches as well as investment in local banks. Citi, HSBC as well as ABN Amro are believed to be closely looking at Centurion Bank for a possible 26 per cent stake buyout.