Private sector lender Federal Bank today said it has started the financial diligence of Catholic Syrian Bank for a merger proposal between the two lenders.
"A financial due diligence of Catholic Syrian Bank has commenced for considering a merger proposal between both the banks," Federal Bank said in a filing to the Bombay Stock Exchange (BSE).
The bank started the due diligence after it received an approval from its board for the acquisition, the Kerala-based Federal Bank said. Shares of Federal Bank were trading at Rs 246.75, up 0.67 per cent in afternoon trade on the BSE.
Federal Bank, which has over 600 branches across the country, posted a net profit of Rs 500 crore in 2008-09.
During the quarter ended June 2009, the net profit of Federal Bank doubled to Rs 136 crore, against Rs 68.15 crore in the corresponding quarter a year ago.
The total income increased to Rs 1,021.79 crore from Rs 841.33 crore, a rise of 21.45 per cent. The total business crossed Rs 55,012 crore at the end of June, 2009.
Kerela-based Catholic Syrian Bank (CSB) has a network of 363 branches and 1 extension counter which includes NRI and service branches.As per their vision 2010 posted on its website, CSB targeted a total business volume of Rs 20,000 crore by deeper penetration in the market.
In addition, the bank which is not listed in any stock exchange also aimed at a total network of 450 branches, to enhance its geographical reach. During 2008-09, the bank posted a net profit of Rs 37.18 crore and the total income stood at Rs 656.1 crore.
Capital Adequacy Ratio of the bank stood at 12.29 per cent at the end of March 2009.
