The Hindu Business Line : Shamrao Vithal to buy Bangalore-based co-op bank

Shamrao Vithal Co-operative Bank (SVCB) will acquire Bangalore Central Co-operative Bank (Souvardha) Ltd. The deal, which may cost about Rs 150 crore, is likely to be finalised next month, said Mr Suresh Hemmady, Chairman, SVCB.

As on September 2006, Souvardha bank's total deposits were about Rs 144 crore, advances Rs 42 crore, NPAs Rs 29 crore and total losses were around Rs 25 crore. It has 11 branches in Karnataka and about 100 staff members who may be offered a VRS. Post-acquisition, SVCB's branch network would rise to 72 from the present 61.

In September, it had acquired Kolhapur-based Mahavir Co-operative Bank for Rs 13 crore.

"As long as RBI continues with its policy of not allowing co-operative banks to open new branches, we have no option but to look for acquisitions and mergers," said Mr Hemmady.

Shamrao Vithal also plans to convert five of its 10 extension counters into branches. Its current networth is Rs 360 crore and the capital adequacy ratio is around 11 per cent. In 2005-06, the bank had a net profit of Rs 21 crore and is targeting between Rs 35-40 crore this fiscal.

Development plans

The bank also plans to offer other services including foreign exchange services, currency chest facility and online equity trading.

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