Shares of private sector lender Karnataka Bank jumped 5% in the initial trade on the Bombay Stock Exchange (BSE) after a report of ICICI Bank is looking to acquire the Mangalore-based bank. However, both banks have denied the report of acquisition.
“The management is not for any stake sale,” said P Jayarama Bhat, chief executive officer, Karnataka Bank. “The bank denies any such rumour as reported in the newspaper.”
ICICI Bank said in a filing to BSE:“The Bank is currently not considering merger or acquisition of any bank.”
Bhat said the fundamentals of the Karnataka Bank are in good shape. The bank is adequately capitalised after the rights issue two years ago and it is planning to raise funds via tier-II bonds in the current fiscal.
After the denial, shares of Karnataka Bank pared the early gains and closed the day at Rs 122.60, showing a gain of 1.5%. The Indian Express reported on Tuesday that ICICI Bank is looking to acquire Karnataka Bank and it had sent a proposal to the RBI in this regard.