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After acquiring 18 urban co-operative banks (UCBs) in the last 25 years, Pune-based Cosmos Co-operative Bank is pausing on further buyouts and will be focusing on organic growth.
The second largest UCB in the country has also ruled out conversion into a small finance bank, as the current ethos and structure of the bank are robust enough to expand business further.
“We are not going to actively look for acquisitions. The bank will first consolidate the setup and operations and grow the business,” said Milind Kale, chairman, Cosmos Bank, in media financial results for FY24.
So far, the bank has merged 18 small co-operative banks into itself. Mumbai-based Maratha Sahakari Bank (with 7 branches) and Sahebrao Deshmukh Sahakari Bank (with 11 branches) merged into Cosmos Bank in the financial year ended March 2024. With these mergers, the bank’s branch count in Mumbai has risen to 50.
At present, Cosmos has 170 branches across 7 states.
Referring to small finance banks, Kale said there is competition from these entities. “The days of servicing those who come to branches are over. The focus is on reaching out to customers, especially small businesses (those with loan exposures of below Rs 1 crore),” Kale said.
Cosmos Bank may adopt business practices of small finance banks but does not think there is a need for converting into an SFB, he said.
The UCB's net profit more than doubled to Rs 384 crore for FY24 from Rs 151 crore in FY23. Its loans rose to Rs 15,192 crore in March 2024 from Rs 13,116 crore a year ago. The deposits grew to Rs 20,216 crore from Rs 17,629 crore at the end of March 2023.
The bank has guided for 15 per cent growth in deposits as well as advances in FY25. The Pune-based lender will increase the share of retail, including small businesses and loans to individuals and households, in total loans from the present 43 per cent to 50 per cent by the end of March 2025. It would go slow on lending to large customers, with exposures of over Rs 1 crore. At present, the share of large customers is 57 per cent, Kale added.
