• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Port Info

• Ships in Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

Mumbai , Oct. 4

THE boards of Federal Bank Ltd and Lord Krishna Bank meeting in Mumbai on Wednesday are expected to discuss an acquisition and merger proposal.

According to sources close to the banks, the boards, meeting separately, are expected to take an in-principle decision on the proposal.

Thereafter, both banks will go for statutory clearances, including the Reserve Bank of India approval.

Both are Kerala-based old private sector banks. In LKB, its director Mr Mohan Puri holds 65 per cent stake.

In Federal Bank, ICICI Bank holds 20 per cent stake, which it is expected to bring down to 10 per cent as per the RBI guidelines over a period of time.

If the deal goes through, it will enable Federal Bank to increase its branch network at one go.

However, there would be a problem as both banks have branches in several places in Kerala in close proximity to each other. LKB has 112 branches in 11 States.

Lord Krishna Bank had reported a net loss of Rs 24.41 crore for the year ended March 2005. In the first quarter of the current year ended June 30, 2005, the bank made a profit of Rs 7.66 crore.

Meanwhile, Federal Bank is going for a GDR issue to raise $80 million to fund its expansion plans.

Share price of Federal Bank closed at Rs 194.60 on the BSE on Tuesday, up by 2.39 per cent over yesterday's close.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
SBI, Dabur sign MoU to finance farmers

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line