IDBI Bank zeroes in on Federal Bank for acquisition

IDBI Bank has also completed due diligence, an exercise undertaken by the acquirer to assess the value of the entity before purchasing it, a source close to the development said. When contacted, Federal Bank Managing Director & CEO M Venugopal declined to comment on the matter. The acquisition, if it materialises, would enable IDBI to consolidate its position among state-run banks by strengthening key segments such as branch network, human resources and client acquisition, besides augmenting its deposit-base.

With 641 branches, the Federal Bank is one of the largest private sector banks in the south with a total business of around Rs 59,000 crore and deposits of Rs 33,439 crore. IDBI Bank, which had acquired United Western Bank a few years ago, has been on the look out for another private sector bank with a strong deposit-base and technology advantage. The Bank, the source said, had initially shortlisted a host of medium-sized banks like South Indian Bank, Karnataka Bank and Bank of Rajasthan along with Federal Bank as potential acquisition targets.