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Federal Bank attempt to acquire Catholic Syrian Bank riles church

Federal Bank attempt to acquire Catholic Syrian Bank riles church
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First Published: Thu, Nov 12 2009. 11 23 PM IST
Updated: Thu, Nov 12 2009. 11 23 PM IST
Kochi: The Roman Catholic church on Thursday said that it would oppose any move by Federal Bank Ltd to acquire Catholic Syrian Bank (CSB).
The opposition was voiced a day before the Federal Bank board meets to discuss the report on a due diligence of CSB conducted by consulting firm KPMG.
A “CSB Protection Committee”, which has Mar Andrew Thazhath, archbishop of the archdiocese in Thrissur as patron, issued a statement on Thursday saying any attempt to merge CSB with any other bank would be resisted. It added that to ensure that “the bank which is dear to the people of Thrissur retains its identity”, it will line up investors to buy CSB shares.
“The committee, with the blessings of the church, had met a number of potential investors who were willing to buy CSB shares at a price higher than that offered by Federal Bank under the merger deal,” said Johnny Chandy, committee convener and a former board member of the Thrissur-based CSB.
“…in the wake of an assurance of money coming in to meet the capital needs of the bank, we have confidence now to make public our stand and see that nobody takes over the bank,” Chandy said.
The church has in the past opposed a takeover of CSB; in the mid-’90s when Bangkok-based non-resident Indian Surachan Chawla bought a stake of about 38%, the church, led by then bishop Joseph Kundukulam, had said any attempt to take over the bank, started in 1920 by the local Christian community, had to be opposed.
At a June meeting in Chennai, some board members of both banks had arrived at a swap ratio whereby every share of CSB would fetch 1.25-1.5 Federal Bank shares. The combined entity is expected to have a total business of Rs65,000 crore and assets of at least Rs25,000 crore.
Federal Bank shares on the Bombay Stock Exchange closed at Rs230.75 on Thursday, down 3.11%, while the benchmark Sensex closed 0.91% down at 16,696.03 points.
Federal Bank has been working on a CSB takeover for at least a year now.
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First Published: Thu, Nov 12 2009. 11 23 PM IST
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