The state-run IDBI Bank on Thursday said it will merge its Pune-based wholly-owned home-loan subsidiary IDBI Homefinance with itself to consolidate its home loan business and gain more market share.
The IDBI Bank board, which met here on Thursday, gave its in-principle approval for the merger. The move is aimed at consolidating its home loan business which is currently being rolled out through the bank's own housing finance division as well as IDBI Homefinance (IHFL).
IDBI Bank took over the erstwhile Tata Home Finance in September 2003 and renamed it as IHFL as a pure-play home loan player. As of end March 2010,IHFL had an outstanding home loan portfolio of Rs 3,537 crore as against Rs 3,089 crore in FY09.
IHFL's net NPAs stood at 0.34 per cent and capital adequacy ratio at 13.31 per cent. IHFL is present in 18 centres and over 150 employees.
Earlier, IDBI Bank was actively looking at selling this and had shortlisted seven potential buyers including Dewan Housing. However, the deal did not materialise.
The bank has not fixed any time-frame to complete the merger but will soon initiate the process.
IDBI Bank, which posted a net profit of Rs 251 crore in the June quarter, which was up 46 per cent from Rs 172 crore in the year-ago period, is expecting a capital infusion of above Rs 3,119.04 crore from the government soon.
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