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Canara Bank is expecting at least ₹1,000 crore through disinvestment of its 29.99 per cent stake in its subsidiary CanFin Homes Ltd in a month’s time.
Speaking at the sidelines of the IBA’s 72nd AGM, RA Sankara Naryanan, Managing Director and CEO, said there are about 12 serious suitors keen on buying the entire stake, including foreign players and domestic non-banking finance companies.
The Bengaluru-headquartered public sector bank is looking to completely exit from the housing finance company.
Besides Canara Bank, Caladium Investment Pte Ltd and Chhattisgarh Investment are the major shareholders in CanFin Homes with 13.45 per cent and 9 per cent stake, respectively, as at June-end 2019.
Amalgamation plan
The government had on August 30 announced its decision to amalgamate six banks with four banks, including amalgamating Manipal headquartered Syndicate Bank with Canara Bank.
The proceeds from the disinvestment of CanFin Homes, the expected capital infusion of ₹6,500 crore, and the amalgamation will help Canara Bank with growth capital and increase capital adequacy ratio from 11.9 per cent to 13 per cent.
After the Board approval for the amalgamation, which is expected in a few days, Canara Bank will form committees, comprising top officials of Canara and Syndicate Banks, to ensure smooth amalgamation.
Sankara Narayanan said his bank will appoint a consultant to conduct financial and legal due diligence and give fairness opinion.
“The swap ratio has to be transparent, just and right for the minority shareholders. If you satisfy that then the book integration is simple. The major issue is HR and IT,” said the Canara Bank chief. The combined entity will have 10,400 branches. There will be an overlap in the case of 800-900 branches.
“There is no question of merger or closure of the branches immediately. We can create efficiencies by integrating the administrative offices to start with. We have 130 administrative offices and they have about 100. Staff at both levels can be more effectively utilised,” he said.
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