Kerala-based Federal Bank is acquiring around 5 per cent stake in unlisted Catholic Syrian Bank (CSB).
While confirming the move, Federal Bank Chairman M Venugopalan described the stake acquisition as a strategic investment. He, however, refused comment on reports that the bank might look at merging CSB with itself at a later date.
He also did not disclose the modalities of the share purchase. All that Venugopalan was willing to say was that the shares were being purchased from the Chawlas, the NRI family from Thailand, who hold around 27 per cent stake in the bank.
Sources involved with the deal said Federal Bank bought CSB’s shares at around Rs 250 each.
“The regulator has been informed about the development,” said a bank executive. The boards of the two banks are, however, yet to approve the deal. Catholic Syrian Bank could not be contacted for comment.
For the year ended March 2008, Catholic Syrian Bank, which operates through a network of 348 branches, reported a net profit of Rs 36.56 crore. Federal Bank posted a net profit of Rs 360 crore in 2007-08.
