After lying low for about a year on the acquisition front, Saraswat Coop Bank – the largest among urban cooperative banks (UCBs) – is looking at five UCBs in Maharashtra for a possible merger.
In fact, 66 banks had approached with merger proposals and Saraswat zeroed in on 21 of these. Talks with five, including one from Ichalkaranji Urban Cooperative Bank, are in an advanced stage, according to Saraswat Coop Bank's Chairman Eknath Thakur. He was interacting with reporters at the UCB's new headquarters in Mumbai.
The bank had put plans for acquiring weaker UCBs on hold in the light of the recent economic slowdown. Till date, it has acquired seven banks by investing Rs 280 crore.
Saraswat bank has also evinced interest to bail out the Baroda-based Anonya Sahakari Cooperative Bank. On September 3, the Reserve Bank of India suspended the licence of the 122-year-old Anonya Sahakari in view of the lender's weak financial position and mounting non-performing assets.
“ Anonya is the first cooperative bank in the country. We do not want it to go under,” Thakur said.
Referring to Saraswat's performance, he said the total business was close to Rs 24,000 crore now. Deposits had grown five per cent (year-on-year) to Rs 14,500 crore. Credit had also grown 15 per cent to Rs 9,500 crore.
Regarding targets for this year and the medium-term, the bank expects business worth Rs 25,000 crore by December. Also, it will open 50 more branches to take the total tally to 250 by the calendar year-end. The expanded network is expected to help in increasing share of low-cost deposits, current and savings accounts (Casa). “We will like Casa to have a 35 per cent share in the total deposits by March 2014,” Thakur said.
The share of Casa had improved to 29.77 per cent at the end of March this year from 24.91 per cent a year ago. The bank had posted a 43.23 per cent drop in net profit to Rs 119.67 crore for 2009-10 from Rs 210.79 crore in 2008-09 due to tepid growth in credit and low level of return on investments.
