CSB Bank merger with IDBI Bank likely after Fairfax deal
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓CSB Bank may merge with IDBI Bank following a deal involving Fairfax.
- ✓Abizer Diwanji said, “Fairfax is more likely to merge CSB with IDBI Bank.” The two banks have a combined loan book of ₹3 trillion.
- ✓While CSB Bank has many branches in southern India, IDBI Bank focuses on retail loans.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Livemint
- Reading Speed
- 6 Minute(s)
- Market Focus
- India Economy
While Fairfax has the option to pare its stake, a merger is likely to be favoured. “Fairfax is more likely to merge CSB with IDBI Bank. Now that it is known that CSB’s shareholding needs to change as part of the IDBI Bank deal, a potential stake sale would not yield good valuations,” said Abizer Diwanji, founder of advisory firm NeoStrat Advisors.
Case for a merger
CSB’s book is also complementary to IDBI's, as they are largely present in southern India, said Diwanji, who had also worked on the 2005 merger of IDBI Bank with its parent development finance institution, the Industrial Development Bank of India (IDBI).
At the end of the June quarter, CSB Bank had 868 branches, with 31% in Kerala, 16% in Tamil Nadu, 13% in Andhra Pradesh, and 11% each in Maharashtra and Karnataka. The remaining 22% were distributed across other states, its first-quarter presentation showed.
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