Centurion Bank, Bank of Punjab examine merger option

Mumbai: Centurion Bank and Bank of Punjab have agreed in principle to merge. The merger will take place through a share-swap deal to be decided after due diligence. The boards of directors of the two banks met yesterday to consider the merger proposal between the two banks.

The two boards resolved to pursue the merger subject to satisfactory due diligence, a fair share- swap ratio and the statutory, regulatory and corporate approvals, including approvals of the RBI, stock exchange and the shareholders.

Rana Talwar, chairman, Centurion Bank Limited said, "We are delighted at the opportunity the merger of Centurion Bank and Bank of Punjab creates. Both banks have excellent franchises, which will complement each other. The combined entity will be a powerful private sector bank with a nation-wide reach. The merged entity will be well capitalised, have strong management team, and will be able to achieve considerable revenue and cost synergy. The combined bank will be full-service commercial bank with a strong presence in the retail and SME segments."

The two boards will meet again on June 29 to consider the final terms of the merger, a joint release from the banks said. Information about the share-swap ratio would be available only after the next board meeting, officials said.

While Centurion Bank has a strong presence in the west and the south, the Bank of Punjab has a strong presence in the north.

A joint press release from the two banks quotes C R Sharma, managing director and Tejbir Singh, executive director of Bank of Punjab Ltd as saying, "Bank of Punjab''s strong franchise in North India and Centurion Bank''s strong presence in the west and south of the country would ensure that the combined entity would emerge a winner. With the merger of the two banks the combined entity will emerge as a stronger bank. It is also a synergistic fit in terms of product offerings and regional presence. We are excited about the future prospects of the combined entity."