Seven banks express interest in takeover; UCO Bank, Corpn Bank may join fray

Our Bureau

Too many suitors


UWB board

to present `scheme of reconstruction'

Bank in

the red by Rs 300-350 crore

Merger seen

complementing South-based banks' presence

Mumbai, Sept 4

The great scramble for United Western Bank (UWB) is on, with the list of contenders growing by the hour.

Last heard, seven banks - including ICICI Bank and Standard Chartered Bank and the co-operative Saraswat Bank - have made public their "expression of interest" and more could join.

The board of UWB, which met today, has decided to present a `scheme of reconstruction' to RBI with a commitment to bring in funds immediately to meet all liabilities.

Among the banks that have expressed their interest in UWB are ICICI Bank, Canara Bank, Federal Bank, Andhra Bank, Standard Chartered Bank, Allahabad Bank and Saraswat Co-operative Bank.

Other banks that are likely to announce their plans in a couple of days include UCO Bank and Corporation Bank.

Since most of these banks are based outside Maharashtra, they are eager to snap up UWB's 230-branch network.

In recent times, Punjab National Bank took over Nedungadi Bank in Kerala while Oriental Bank of Commerce picked up private sector GTB in Hyderabad. Bankers were cool when Nedungadi and GTB went bust.

"This merger will help foreign banks that have a restriction on opening new branches. Even ICICI Bank, which was recently hauled up for violating IPO and KYC norms, was finding it hard to land new branch licences. ICICI Bank has a total network of 650-odd branches across the country and the merger, if it goes through, will give them an additional 230 at one go," said a banking analyst.

Unlike GTB, where the losses were in the range of Rs 1,200-1,500 crore, UWB is in the red by not more than Rs 300-350 crore, he added.

Mr M.B.N. Rao, Chairman and Managing Director of Canara Bank, said: "Though we have a pan-Indian presence we are stronger in the south. This merger will complement our branch network and give us a good presence in Maharashtra."

Mr K. Ramakrishnan, Chairman and Managing Director of Andhra Bank, said: "The NPAs of UWB may increase the bank's NPAs from 1.99 per cent to about three per cent at the most.

"And the capital adequacy ratio may fall from the current 14.5 per cent to about 12-12.5 per cent. However, the mix of semi-urban and urban branches will help."

Mr S.K. Banerji, Managing Director of Saraswat Bank, said: "If Federal Bank can take over UWB so can we, because our reserves are higher. We have also made an application to the RBI."

Related Stories:
ICICI Bank proposes to take over UWB
United Western Bank placed under moratorium
`Federal Bank interested in taking over United Western'

(This article was published in the Business Line print edition dated September 5, 2006)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.