Ifc To Acquire 10 Per Cent Vysya Bank Pie

International Finance Corporation (IFC), an affiliate of the World Bank, has decided to pick up a 10 per cent stake in private sector Vysya Bank.

The proposed equity stake subject to Foreign Investment Promotion Board approval will dilute non-resident Indians and financial institutions'' stake in the bank to 7.26 per cent from 8.3 per cent.

The stake will be picked at a price of Rs 150 per share which includes a premium of Rs 140 per share, Vysya Bank chairman and managing director K R Ramamurthy told newspersons while announcing the annual results of the bank. The strategic alliance partner of the bank, Banque Bruxelles Lambert (BBL) is also planning to increase its stake in the bank by 2.5 per cent to enable it to maintain its holding at 20 per cent of the post-issue capital of the bank at the same price at which the shares are proposed to be subscribed by IFC.

 

Announcing the annual results, Ramamurthy said the bank posted a net profit of Rs 44.31 crore, recording an increase of 46 per cent over the previous year.

The bank's NPA has also dropped to 6 per cent during 1999-2000 compared with 14 per cent during the previous year. The bank was able to recover around Rs 255 crore during the year, he said.

The net worth of the bank stood at Rs 590 crore and capital adequacy ratio at 12.24 per cent. The bank registered an asset growth of 27.5 per cent during the year. The deposits of the bank stood at Rs 7,425 crore.

Ramamurthy said the board approved the proposals regarding BBL and IFC and necessary consent from the shareholders will be sought at the annual general meeting of the bank on May 29.

By implementing these proposals, the share capital of the Vysya Bank would increase to Rs 22.66 crore from Rs 19.82 crore and would further result in an inflow of Rs 39.66 crore by way of share premium adding to the reserves of the bank. The investment, treasury and forex operations of the bank continued to play a significant role in the bank's performance, contributing to the bottom line of the bank.

Ramamurthy said the bank plans to pursue its new strategic initiatives in retail, commercial and corporate banking. the bank has commenced implementation of its technology initiative of online centralised banking product at an investment outlay of Rs 60 crore.