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.
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