Centurion Bank to acquire Lord Krishna Bank
19 August 2006
Mumbai: Centurion Bank of Punjab Ltd. is acquiring privately held Lord Krishna Bank in an all-stock deal. The boards have approved an 'in-principle' merger between the two banks. The merger, however, will be subject to satisfactory due diligence, a fair share-swap ratio and also the requisite statutory, regulatory and corporate approvals, including those from the RBI, the stock exchanges, and shareholders of both the banks.
"We are extremely pleased to receive the go-ahead from our board to pursue this opportunity. Growing by inorganic means is an important component of our strategy. The proposed merger with Lord Krishna Bank would further improve our franchise and customer proposition across the country, particularly in northern India, Karnataka, Kerala, and Maharashtra. Having successfully completed the integration process of Bank of Punjab with the erstwhile Centurion Bank we believe we are uniquely placed to tap the synergies that exist between Lord Krishna Bank and ourselves," Shailendra Bhandari, managing director and CEO, Centurion Bank of Punjab, said.
The combined entity would have a network of 361 branches and 12 extension counters nationwide, with an extensive and in-depth coverage in Kerala and Punjab. Centurion Bank of Punjab has received approval from the Reserve Bank of India to open a further 30 branches in the current fiscal.
"We have been evaluating various options to create value for our stakeholders as well as employees, and felt that the proposed merger was the preferred option. It is a synergistic fit in terms of product offerings and geographical coverage. The proposed merger would add value to stakeholders in addition to providing modern banking services to customers. We are very optimistic about the future prospects of the combined entity," said B. Swaminathan, managing director, Lord Krishna Bank.
Centurion Bank of Punjab had a deposit base of Rs10,372.1 crore and net advances of Rs7,452.4 crore as of June 30, 2006.
Lord Krishna Bank had a deposit base of Rs2,278.9 crore and net advances of Rs1,420.9 crore as of March 31, 2006.