The Telegraph
 
 
ARCHIVES
Since 1st March, 1999
 
THE TELEGRAPH
 
 
Email This Page
Centurion, LKB set to merge

Mumbai, Aug. 19: Cochin-based Lord Krishna Bank (LKB) is being merged with Centurion Bank of Punjab (CBoP).

For Rana Talwar of Sabre Capital, who first made his mark by acquiring Centurion Bank and later Bank of Punjab, the LKB deal would create an entity with a nationwide network of 361 branches, 12 extension counters and a large coverage in Kerala and Punjab.

The merged entity would have a deposit base of Rs 12,651 crore, advances of roughly Rs 8,900 crore and a balancesheet size of over Rs 15,000 crore.

The boards of Centurion and LKB met today and considered, in-principle, a merger of the two banks.

A statement issued by Centurion said the boards have resolved to pursue the merger subject to satisfactory due diligence, a fair share-swap ratio and all the requisite statutory, regulatory and corporate approvals. Approvals by the RBI, the stock exchanges, and the respective boards and shareholders of both banks are required.

Centurion managing director Shailendra Bhandari said: “We are extremely pleased to receive the go-ahead from our board to pursue this opportunity. Growing by inorganic means is an important component of our strategy; the merger with Lord Krishna Bank would further improve our franchise and customer proposition across the country, particularly in north India, Karnataka, Kerala, and Maharashtra.

“Having completed the integration process of Bank of Punjab with the erstwhile Centurion Bank, we can now tap the synergies between Lord Krishna Bank and ourselves.”

B. Swaminathan, managing director of LKB, said, “We have been evaluating various options to create value for our stakeholders as well as employees, and felt that the proposed merger was the preferred option. It is a synergistic fit in terms of product offerings and geographical coverage. The proposed merger would add value to stakeholders in addition to providing modern banking services to customers. We are very optimistic about the future prospects of the combined entity.”

The bank has also been courted by Federal Bank in the past.

Bankers feel the merger reflects the inclination among banks to achieve scale and also have a pan-India presence. IndusInd Bank, another private sector bank, is on the verge of inducting a strategic investor.

For Centurion, the merger will increase its presence in the south, particularly in Kerala where LKB has a good retail franchise. The private sector banking space has not yet been fully opened up as there are restrictions on the quantum of equity that foreign banks can take. This limitation is expected to be done away in 2009. Clearly, domestic banks are preparing for the future.

Top
Email This Page