Not eyeing acquisitions for growth, says Federal Bank chief

Federal Bank Limited is not looking to reorient its strategy towards "inorganic growth" for now, Shyam Srinivasan, Managing Director and Chief Executive Officer, has said.

This private sector bank will continue to focus on ‘organic growth’ even as competition was adopting merger route for growth, Srinivasan told Business Line here.

He was responding to a question on whether Federal Bank would now look at acquisitions for growth instead of relying only at organic growth.

Srinivasan’s remarks are significant as it came on the heels of Kotak Mahindra Bank, a private sector lender, acquiring Bengaluru-headquartered ING Vysya Bank in an all stock deal.

This deal had catapulted Kotak Mahindra Bank to the fourth largest private bank in the country in terms of total business.

Srinivasan noted that Federal Bank still had more branches (1,247) than that of Kotak Mahindra Bank (1214 branches) post its ING Vysya bank acquisition.

While there was no proposal on the table for buyout of any other bank, Federal Bank however was not averse to buying "good quality portfolios", Srinivasan said.

"We are very much open to acquiring good quality portfolios (of assets)", Srinivasan said, adding that the bank would be careful in its choice given the weak asset quality environment in the country.

Federal Bank had closed the fiscal just ended with a credit growth of about 18 per cent.

For the current fiscal, the aim will be to grow its advances at 600-800 basis points over the banking industry’s growth rates, said Srinivasan.

srivats.kr@thehindu.co.in


Source : Thehindubusinessline