Oriental Bank looking to acquire a South-based bank

Oriental Bank looking to acquire a South-based bank

New Delhi: Five years after acquiring the Hyderabad-based Global Trust Bank, state-owned Oriental Bank of Commerce has begun the hunt for another lender to expand its footprint in South India.

The bank has a strong presence in the Northern region. To strengthen its position in the South, OBC would go in for inorganic growth if some good opportunity come up, a senior bank official told PTI.

“We are a strong bank. We can take over a South-based bank having synergies to expand business in the region," the official said.

In 2004, OBC acquired Global Trust Bank, which helped establish its footprint in South India. OBC merged about 100 branches of GTB as part of an amalgamation process along with non-performing assets of Rs1,362 crore at the end of March 2004.

Asked how the bank would fund the acquisition if it happens, the official said the capital adequacy ratio (CAR) is close to 13%, and given the balance sheet size it could raise further capital through bonds.

The CAR is the amount banks keep aside against various risks.

In a bid to strengthen its CAR, OBC raised Rs300 crore from bonds during the month.