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The Reserve Bank of India (RBI) on Wednesday approved the merger of Kotak Mahindra Bank and ING Vysya Bank. From now on, all ING branches will function as Kotak branches, said the central bank.
The acquisition will make Kotak Mahindra Bank the fourth largest private sector lender in the country, will have about 1,200 branches and a total business of Rs 2.25 lakh crore, as on December 2014, and a combined market capitalisation of close to Rs 1.25 lakh crore.
Jaimin Bhatt, president & group chief financial officer, Kotak Mahindra, said there would be a total of 30,000 employees in the bank after the merger, while at the group level, there would be 40,000 employees.
In November 2014, Kotak Mahindra had announced it was acquiring Bengaluru-headquartered ING Vysya in an all-stock deal.
With respect to the branches, Bhatt said change at signage in ING Vysya branches had already begun and the process would be completed within a month. For ATMs, too, the same has started.
On employee rationalisation, Bhatt said, they were in a growth phase and would need people for branch expansion. “We will keep growing and would first utilise our combined employee strength before hiring from external sources,” he added.
On restructuring the existing branch network, he said the company would look into it. In Mumbai, Delhi, Bengaluru and Chennai, the bank would expand its branch network. It would also look at shifting branches to new locations, if necessary, he said.
In February, the proposed Rs 15,000-crore merger deal between Kotak Mahindra Bank and ING Vysya Bank got the Competition Commission of India’s approval.
According to the fair trade regulator, the merger, which would create the country’s fourth largest private sector lender, was “not likely to have an appreciable adverse effect on competition in India”.
The deal implies a price of Rs 790 for each ING Vysya share, based on the average closing price of Kotak shares during the month to November 19, valuing the deal at about Rs 15,000 crore. That was a 16 per cent premium to a like measure of ING Vysya market price, Kotak Bank had stated.
After the merger, the ING Group, with a 6.4 per cent stake, will become the second-largest shareholder in the bank. According to regulations, RBI’s approval is required for an entity other than the promoter to have more than five per cent stake in a bank.The acquisition will make Kotak Mahindra Bank the fourth largest private sector lender in the country, will have about 1,200 branches and a total business of Rs 2.25 lakh crore, as on December 2014, and a combined market capitalisation of close to Rs 1.25 lakh crore.
Jaimin Bhatt, president & group chief financial officer, Kotak Mahindra, said there would be a total of 30,000 employees in the bank after the merger, while at the group level, there would be 40,000 employees.
In November 2014, Kotak Mahindra had announced it was acquiring Bengaluru-headquartered ING Vysya in an all-stock deal.
With respect to the branches, Bhatt said change at signage in ING Vysya branches had already begun and the process would be completed within a month. For ATMs, too, the same has started.
On employee rationalisation, Bhatt said, they were in a growth phase and would need people for branch expansion. “We will keep growing and would first utilise our combined employee strength before hiring from external sources,” he added.
On restructuring the existing branch network, he said the company would look into it. In Mumbai, Delhi, Bengaluru and Chennai, the bank would expand its branch network. It would also look at shifting branches to new locations, if necessary, he said.
In February, the proposed Rs 15,000-crore merger deal between Kotak Mahindra Bank and ING Vysya Bank got the Competition Commission of India’s approval.
According to the fair trade regulator, the merger, which would create the country’s fourth largest private sector lender, was “not likely to have an appreciable adverse effect on competition in India”.
The deal implies a price of Rs 790 for each ING Vysya share, based on the average closing price of Kotak shares during the month to November 19, valuing the deal at about Rs 15,000 crore. That was a 16 per cent premium to a like measure of ING Vysya market price, Kotak Bank had stated.
Kotak Mahindra and associates are significant shareholders in Business Standard Limited
