Federal Bank buys 26% stake in Equirus Capital
23 February 2018
In an attempt to create additional revenue streams, Federal Bank will acquire a strategic minority stake of 26 per cent Equirus Capital for an undisclosed sum. The deal, which was approved by the private lender's board on Thursday, is subject to regulatory approvals and completion of financial and legal due diligence.
The association will also aid Federal Bank in offering a host of products including wealth management services to High Networth Individual and Non-Resident Indian diaspora. The strategic tie-up would help shore up non interest earnings for the bank, while creating additional revenue streams with identified clients.
''This is a landmark deal that demonstrates the bank's wider intent to expand the horizon of its offerings to serve its wholesale and retail customer base. This partnership will serve as a natural complement to our strong origination capabilities and deep client relationships in addition to positioning us as a Universal Financial Services Provider,'' Ganesh Sankaran, executive director, Federal Bank, said.
''With a shift in client preferences, our foray into Investment Banking will help us participate in opportunities and instruments beyond traditional banking products,'' he added.
The investment rationale has been driven by the need to increase the product offerings to a spectrum of wholesale clients by offering comprehensive financial solutions for debt and equity capital markets, structured finance, capital market products and advisory.
''The investment by Federal Bank is a strong endorsement of our team's entrepreneurial venture now on the path to becoming an institution. With this relationship, we intend to expand our product offerings in debt, and leverage on Federal Bank's extensive network and client base to enhance each of our business lines,'' Ajay Garg, Managing Director, Equirus Capital said.
Federal Bank has a network of 1,252 branches and 1,679 ATMs in the country. The bank's total business mix (deposits + advances) stands at Rs 1.85 lakh crore as of December 31, 2017.
Founded in 1931 as Travancore Federal Bank, the lender was renamed Federal Bank in 1947.