Boards of Centurion Bank, HDFC Bank to consider merger
22 Feb 2008
Mumbai: The boards of private sector HDFC Bank and Centurion Bank of Punjab will consider a possible merger on Saturday.
The deal is estimated to be worth over Rs10,000 crore ($2.5 billion), valuing Centurion Bank at Rs57 a share. Shares of Centurion Bank have risen by as much as 8.5 per cent in early trade to a high of Rs61.90 but ended 1.14 per cent down at Rs56.40.
The boards of both banks will meet tomorrow to consider the plan, the banks said in separate filings with the Bombay Stock Exchange today.
HDFC Bank Ltd, India's third-largest bank by market capitalisation, plans to acquire Centurion Bank of Punjab before overseas rivals are allowed to make acquisitions next year.
Major Indian banks like State Bank of India, ICICI Bank Ltd. and others are seeking to grow rapidly before the government reviews rules next year that will allow overseas lenders to acquire local rivals.
Global banks such as Citigroup Inc. and HSBC Holdings Plc. are competing for a larger market share in an economy that is estimated to grow 8.7 per cent this financial year, the fastest pace for a major economy after China.
HDFC Bank also plans to open its first offshore offices in Bahrain, Hong Kong and London in a year to grow overseas and plans to raise $1 billion to fund the expansion.
