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Abhrajit Gangopadhyay

Bangalore , Jan. 12

NATIONAL Housing Bank plans to buy back its five per cent stake in Vibank Housing Finance Ltd. at par, top sources of Vijaya Bank said.

Vibank Housing, a subsidiary of Vijaya Bank, is likely to be merged with the bank before March-end, sources added. "In the current circumstances, there is no effort either from us or from NHB for the stake transfer to come at a premium," sources added.

National Housing Bank had approved of this proposed merger and the legal issues were currently being processed, Vijaya Bank sources said. "We want to consolidate the housing loan portfolio of the bank as well the subsidiary from April 1... hence we are rushing through the legal issues," a top bank source said.

"The home loan segment is booming and this fiscal, we are likely to report a significant business in the home loan business," sources said. However, they did not detail expected disbursement in that segment for the full fiscal. The paid-up capital of the company, which was floated in 1995, was Rs 10 crore of which Vijaya Bank contributed Rs 8.8 crore and NHB Rs 1.20 crore.

Vijaya Bank reported a 630-per cent growth in housing loan portfolio for 2002-03 tracking soft interest rate regime. Advances towards housing jumped to Rs 428 crore in 2002-03 from a mere Rs 66 crore a year ago. The net profit for the bank after first six months in the current fiscal was Rs 176.79 crore as compared to Rs 78.51 crore for the corresponding period a year ago.

More Stories on : Housing Finance | Mergers & Acquisitions

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