Is HDFC Bank close to buying Catholic Syrian Bank? The bank vehemently denies such a development, but financial industry sources say the Aditya Puri-led tech-savvy bank, which has already folded in Centurion Bank and through it, the erstwhile Bank of Punjab, could be hungry for the south-based bank to consolidate its nationwide hold.
This could be the best time to go shopping as banks with stronger balance sheets seek size and scale. The going has been tough in 2008-09 for the banking industry especially for the smaller players. The RBI data shows in 2007-08 Dhanalakshmi Bank and Nainital Bank had capital and reserves of Rs 172 crore and Rs 146 crore respectively, while the minimum required was Rs 300 crore.
Catholic Syrian Bank and Lakshmi Vilas Bank fall on the borderline with just about over Rs 300 crore of capital and reserves. Catholic Syrian Bank’s capital and reserves stood at Rs 305 crore and Lakshmi Vilas Bank had Rs 418 crore in 2007-08.
Analysts said the smaller banks are scouting for possible buyers at this juncture especially at the wake of the global meltdown that has made expansion and capital-raising a daunting task.
Dhanalakshmi Bank registered a net profit of Rs 8.78 crore for the second quarter in the current fiscal, a growth of about 18 per cent compared with the corresponding period in the previous year.
“It makes tremendous sense for the bigger and able banks to gobble up the smaller ones as the pricing could just be suitable for those scouting to expand network,” said an senior official at a private sector bank.
HDFC spokeperson said, “Smaller banks may be looking for buyers, but we have no appetite for acquisitions at this point.” Earlier there were reports that Catholic Syrian Bank was looking at a merger with Federal Bank.