Co-op Bank in buyout again

The Ahmedabad-based Kalupur Commercial Co-operative Bank is once again exploring the acquisition route for expansion and has begun talks with co-operative banks in Gujarat for acquiring four of them.

Ambubhai M Patel, chairman of Kalupur Commercial Co-operative Bank, told Business Standard, "We will acquire four co-operative banks in Gujarat in next 12 months." Kalupur bank is targeting two co-operative banks from Vadodara and two from Ahmedabad.

"We are acquiring a weaker bank from Vadodara and another from Ahmedabad," said Patel. However, he declined to divulge anything else as the talks are in an advanced stages.

The total non-performing asset (NPA) of all the four targeted co-operative banks would amount to Rs 25 crore. The bank claims there would be no adverse affect on the net worth of the Kalupur Bank. The acquisition will be funded through internal accruals and reserves fund. Presently, the bank has capital reserves of Rs 550 crore.

With the acquisition of the four co-operative banks, the bank expects to strength its reach further in Vadodara and Ahmedabad. The bank's long term strategy is to strengthen its branch network from 33 branches to 50 branches in two years. The bank has 27 branches in Ahmedabad and one each in Khambhath, Vadodara, Surat, Bavla, Sanand and Mumbai.

In past, the bank expanded through acquisition of four co-operative banks - Vikram Co-operative Bank, Standard Co-operative Bank, Royal Co-operative Bank and Tapi Co-operative Bank. The bank also undertook modernisation and expansion by adopting core banking solution, Real Time Gross Settlement (RTGS).

Last week, the bank started its foreign exchange department, becoming the first co-operative to get permission in Gujarat and fourth in India.

The other co-operative bank that have the foreign exchange business unit are Saraswat Co-operative Bank, Bombay Mercantile Co-operative Bank and Cosmos Co-operative Bank.

The bank expects to secure Rs 150 - 200 crore business from its foreign exchange division in next remaining eight months of the present financial year.

As of fiscal-ended on March 31 last, the bank had deposits of Rs 1,100 core and, loan and advances of Rs 550 crore. As per the un-audited results, the estimated net profit of the bank stood at Rs 38 crore as compared to Rs 18 crore of last year. The bank claims to have the highest capital adequacy ratio (CAR) of 46 per cent.