SIB scouting for mid-sized bank
Kerala-based South Indian Bank perceives this as the most opportune period for acquiring a small or mid-sized bank to grow inorganically.
"This is the right time as many mergers and acquisitions are happening. Weak banks are getting merged with some others. So we also decided to explore the possibilities of acquiring a small or mid-sized bank. We are not restricting the search to Kerala-based banks alone, but would consider the synergies," the South Indian Bank Chairman, Dr Joseph, told Business Line.
To identify the opportunity, the bank has constituted a sub-committee comprising four directors. The committee is expected to talk to the prospective parties and submit its report by March 31, 2007. "There are a number of banks with a net worth of Rs 300 crore. Such banks, which can neither raise capital nor compete effectively to sustain growth could be acquired," Dr Joseph said.
He said the capital was comfortable at present to afford the purchase, but SIB had not identified the bank as yet. "We can also raise the tier II and upper tier II capital, should need be," he added.
The bank, meanwhile, has surpassed its business target of Rs 17,600 crore in the first quarter to reach a total business volume of Rs 18,100 crore. "Last year, our total business grew by Rs 2,000 crore to Rs 16,000 crore. We doubled this target for the current year and expect to achieve Rs 20,000 crore business by March 2007 and Rs 25,000 crore by March 2008," he said.
It is also in the process of expanding its branch network to 475 this fiscal. It has opened three of the 25 branches for which the regulator has given permission and is planning to open another 12 by December.
