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ICICI Bank, BoM merger on cards

Our Bureau

MUMBAI, Dec. 8

ICICI Bank Ltd is considering the merger of Bank of Madura Ltd (BoM) with it, according to separate announcements made by both banks. The board of directors of both banks are meeting on December 11 to consider the scheme of merger. The scheme has to be c leared by the boards of both banks and the Reserve Bank.

If the merger comes through, the new entity will be the biggest private sector bank in the country with a balance sheet size of Rs 16,000 crore.

BoM has a paid-up capital of Rs 11.93 crore and reserves of Rs 250 crore. Dr K.M. Thiagarajan, BoM Chairman, and associates hold around 25 per cent stake. Mr Uday Kotak of Kotak Mahindra holds 8 per cent stake while employees hold another 4 per cent. The balance is held by the public.

ICICI Bank has been scouting for a private sector bank for sometime now. Reports say it had held talks with Global Trust Bank and Centurion Bank besides BoM.

Mr K.V. Kamath of ICICI appears to have scored over Mr Deepak Parekh of HDFC in creating the largest private sector bank through the takeover.

BoM is a 57-year-old South-based private sector commercial bank with a branch network of 263. It had assets of Rs 3,988 crore and deposits of Rs 3,395 crore as on March 31, 2000. It had a capital adequacy ratio of 15.8 per cent as on that date.

A senior official of ICICI Bank said the merger will enable ``us to spread our network to 16 States. We do not have to seek the RBI's permission for branch expansion''.

DSP Merrill Lynch is acting as advisor to BoM for the deal. ICICI Bank is one of the most tech-savvy and fastest growing private sector banks in the country with a presence in 106 domestic locations, including branches and extension counters.

According to the release issued by ICICI Bank, it is the largest ATM provider in the country with 366 ATMs. As on September 30, ICICI Bank had total assets of Rs 12,063 crore and deposits of Rs 9,728 crore.

BoM closed the day at Rs 131.60 on the BSE, up from Rs 121.90. ICICI Bank closed at Rs 169.85, up from Rs 151.40.