High acquisition cost makes ICICI look for internal growth

High acquisition cost makes ICICI look for internal growth
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First Published: Tue, Jun 03 2008. 12 12 PM IST
Updated: Tue, Jun 03 2008. 12 12 PM IST
PTI
Mumbai: With valuation of banks going up and a very few private ones available for takeover, ICICI Bank is looking at growing internally rather than go for consolidation.
“The public sector is not open for consolidation with private sector and in the private sector, there are very few options,” ICICI Bank joint managing director, Chanda Kochhar, told PTI.
“Emphasis is on organic growth because of valuations...in the domestic market, the way valuations moved, have made consolidation options very expensive,” she said.
Recently, HDFC Bank bought Rana Talwar-led Centurion Bank of Punjab in a share swap deal, valued at Rs9,510 crore, in probably the biggest deal in the banking industry.
For every 29 shares of CBoP, the investors will get one of HDFC Bank.
India’s largest bank State Bank of India faced tremendous resistance when it proposed to merge its subsidiaries, starting with State Bank of Saurashtra with the parent group.
The deal still awaits the Centre’s blessings for the marriage.
“We evaluate what are the options available between organic and inorganic growth. We always ask can we set up that many number of branches and grow our balance sheet in a short period of time and at what cost?,” Kochhar said.
ICICI Bank, in the last 15 months, almost doubled its branch base from 750 to 1,425. While it acquired the Sangli Bank and added 200-odd branches, the remaining were opened gradually.
“We will continue to look for possible acquisitions all the time but if we have the capability to grow at much lower cost, then it is a good option,” Kochhar said.
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First Published: Tue, Jun 03 2008. 12 12 PM IST