AU SFB completes acquisition of Fincare SFB, integration to take 9-12 months

AU Small Finance Bank has completed the acquisition of Fincare Small Finance Bank, effective April 1, marking the first such merger among small finance banks.

The merger will help AU SFB establish a robust pan-India retail banking franchise by leveraging complementary geographic footprints, diverse customer segments with a wider product offering and digital capabilities, the lender said in a release.

”The focus now shifts to ensuring a smooth and seamless integration within the next 9-12 months and deliver exceptional banking services and value to the customers,” it said.

Merger details

Rajeev Yadav, former MD and CEO of Fincare SFB, has been designated as the Deputy CEO of AU SFB and will continue to lead all key asset businesses of Fincare SFB, now housed within the Fincare Unit at AU SFB. Additionally, Uttam Tibrewal, Executive Director at AU SFB, has been elevated as Deputy CEO in addition to continuing as an Executive Director.

The small finance banks had announced the merger in October 2023, wherein shareholders of Fincare SFB received 579 equity shares of AU SFB for every 2,000 shares held. Competition Commission of India (CCI) granted its approval to the merger on January 23, 2024 whereas RBI approved it on March 4, 2024.

“This is among the fastest merger approvals in the Indian M&A space, with all approvals received within a span of 4.5 months,” the release said.

Integrated business

Post integration, AU SFB’s  balance sheet is seen crossing ₹1.17 lakh crore with a deposit base of ₹89,854 crore as of December 2023 figures. Fincare SFB’s over 59 lakh customers will become part of the merged entity taking the total customer base to over 1 crore and number of employees to 43,500. The bank will have a network of more than 2,350 physical touchpoints across 25 states and union territories, with the aim of having over 100 touchpoints in nine states.

AU SFB recently consolidated its operations into five business groups and ‘Fincare Unit’ shall become the sixth business group. This new business is expected to provide AU SFB with enhanced access to South India, significantly expanding its distribution network. This increased presence will facilitate the distribution of the bank’s diverse range of products and services to a wider customer base, strengthening its market position in the region, it said.

To ensure seamless transition and minimal customer disruption, both the banks have set up a dedicated task force and equipped its call centres to answer customer queries.

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