Mergers and acquisitions seem to be gaining currency among private sector banks. After the commencement of due diligence by a clutch of private equity funds, including Sabre Capital Worldwide (a global fund floated by former Standard Chartered Bank chief executive Rana Talwar), and a Citigroup entity, for Centurion Bank, India's first 'foreign private sector' bank Vysya Bank is in talks with the north-based new private bank -- Bank of Punjab.
The buzz about a potential merger between both the banks started after the senior officials of both the banks met each other.
Vysya Bank has over 400 branches and a very strong presence in the south, while Bank of Punjab, with around 101 branches, is a predominantly north-based bank.
When contacted, Bank of Punjab's chairman Darshanjeet Singh denied any talks about a merger.
He said: "We have been talking to Vysya Bank for ATM sharing. We are also looking at other ways of furthering our business with them, including cash management services."
Vysya Bank managing director Bart Hellemans too denied any merger talks and said that the bank was looking at ways to increase business with Bank of Punjab.
However, market sources say that this could be the first step towards a potential merger. The Bank of Punjab scrip was up by 4.98 per cent to Rs 14.75 at the Bombay Stock Exchange today, while the Vysya Bank scrip was up 5.10 per cent at Rs 252.35 after touching an intra-day high of Rs 263.
Earlier, there have been rumours about the Bank of Punjab being in talks with HDFC Bank and ICICI Bank for a possible sell off.
However, all these talks were denied. The Netherlands-based ING Group has 43.99 per cent stake in Vysya Bank now. ING acquired a 23.99 per cent stake from the GMR Group for Rs 340.8 crore (Rs 3.41 billion).
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