Mumbai, December 16: ICICI Bank has set its sights on Bank of Punjab Ltd,which has the largest retail customer base among the new-generation privatesector banks. According to industry sources, ICICI Bank has already made the"first move" even though no formal discussion has yet taken place in thisregard. Contacted in Calcutta, ICICI Bank managing director and CEO HN Sinorsaid: "We are exploring all possibilities...but nothing specific has firmedup yet." ICICI Ltd spokesperson Kalpana Morparia refused to comment on theissue.According to banking analysts, ICICI Bank's plans to take over or merge Bankof Punjab makes sense as it is in line with its overall retail thrust. Bankof Punjab, which completed four years of operations in March 1999, has anetwork of over 50 branches and extension counters and a customer base offour lakh. Having built its presence in north India, the bank has beentrying to extend its presence in the southern and eastern parts of thecountry.
The bank, with a capital base of Rs 105 crore, had posted a net profit of Rs32.42 crore in 1998-99. Its deposit base increased by 34 per cent last yearto touch Rs 1,766 crore while the advances portfolio jumped by 62 per centto Rs 842 crore. Its investments grew by 21 per cent to Rs 823 crore infiscal 1999. Its capital adequacy ratio stood at 13.17 per cent in March1999 and percentage of net non-performing assets (NPAs) to net advances wasto the tune of 3.66 per cent.
ICICI Bank is believed to have initiated a simultaneous move to explore thepossibilities of merging either Centurion Bank or Bank of Punjab with itthrough a share swap. Even though no due diligence has been conducted inregard to Centurion Bank, sources close to the parent term lendinginstitution said the "deal" with Centurion Bank may not work out ultimatelyas its balance-sheet was "not that attractive".Centurion Bank, which has anetwork of 33 branches, has recently acquired the branch network of 20thCentury Finance besides the retail assets of the non-banking financecompany. Despite that, the quantum of non-performing assets and the overallquality of assets may prove deterrent factors, sources pointed out.
INSIGHT :
ICICI ADR jumps to $15
One merger in the bag and another on the cards was enough to move even thegiant of giants, the IDBI which hit the upper circuit.The M&A mania poweredmany many banking scrips written off by the market till recently back intolife. On ICICI counter, foreign investors picked up where the localoperators had left pushing up the ICICI ADR in the opening session on theNasdaq. to $ 15.75.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.