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Thrissur based Catholic Syrian Bank (CSB) received shareholders nod for Initial Public offering (IPO) of shares.
The Annual General Meeting of the Bank, held on Monday approved the special resolution seeking approval for the IPO. The general meeting has declared a dividend of 15% to the shareholders.
S Santhanakrishnan, chairman of the bank said that since implementation of Basel III regime and the transitional arrangement for the same has come into vogue, the bank is in the process for raising capital through preferential allotment basis subject to the regulatory approval.
Bank’s Initial Public Offering of shares follows after completion of the preferential allotment of shares, he added. The current capital adequacy ratio of the bank is 12.29%.
CSB is the only Kerala based bank which had not gone for public issue so far. All other banks, Federal Bank, South Indian Bank (SIB) and Dhanlaxmi Bank had made public, years back.
For the public issue, the decision is to authorise the board to make further issue of capital to the extent of shares remaining in the bank’s authorised capital. The unissued shares add up to a little more than 5.8 crore of Rs 10 each.
CSB had received the in-principle clearance for tapping the market in 2012 May. The AGM re-elected S.Ramakrishnan, Bobby Jose and K.Subramanya Sarma and M.Madhavan Nambiar to the board.
In this April, NRI businessman M A Yusuf Ali has cornered 4.99% shares of the 93-year-old bank in which the Catholic Church of Kerala, especially Thrissur Arch diocese, has a big say.Yusuf Ali who runs Lulu Hyper Marts across the Gulf countries and owns the largest shopping mall in South India, is eyeing another three% stake in the bank.
He picked up the CSB shares from Bangkok based Indian business man Sura chan Chansri Chawla, who was the largest shareholder of the bank. With this transaction the shareholding of Chawla will come down to 13% from 18%.
In February, the bank had sold nearly one% stake held by Chawla to Rakesh Bhatia, who is the managing director of CSB. Chawla had reduced his stake from 36.18 % that he held initially to 18%.
According to the stipulation of the central bank, he has to reduce his holding to 10%. Other major stakeholders of CSB are Mumbai-based brokerage Edelwiess (4.99%), Muthoot Pappachan Group [3%] and L&T [2%]. Mauritius-based private equity funds AIF Capital, Gartmore Private Equity and Siguler Guff and Co together hold 15% stake.
In 1994, Chawla had bought 2.14 million shares in the bank, acquiring a 36.18 % stake.
The Archdiocese of Thrissur opposed Chawla’s acquisition as it felt this would lead to a takeover; it wanted to preserve the bank’s identity. In 2007, the banking regulator asked Chawla to offload his stake and reduce it to 10%, citing Foreign Exchange Regulations Act.
Chawla sold five% to Federal Bank soon after, triggering speculation that a neighbourhood bank was eyeing a takeover. This prompted the Archdiocese to come out once again and voice opposition.
CSB has earned a net profit of Rs 32.67 crore in 2012-13 as against Rs 25.90 crore in the previous financial year, with a total business of Rs 21,193 crore. The bank has a branch net work of 395 and 214 ATMs. As on 31st March, 2013 net NPA of the bank is 1.12%.
