Karnataka Bank scoffs at acquisition rumours

Karnataka Bank scoffs at acquisition rumours

 Mangalore-based private lender Karnataka Bank Ltd. denied rumours of an acquisition bid by India’s largest private sector lender ICICI Bank Ltd., in the wake of a media report that ICICI Bank Ltd. had submitted a formal proposal to the Reserve Bank of India (RBI) to acquire Karnataka Bank.

"It is absolutely false, I don't know what prompted the media report, it has no credibility," the MD and CEO of Karnataka Bank, P Jayarama Bhat told Deccan Herald. In a regulatory filing, Karnataka Bank said, "With reference to the news item appearing in a leading financial daily titled "ICICI Bank looks to acquire Karnataka Bank, Karnataka Bank Ltd. has now clarified to BSE that the bank deny any such rumour as reported."

ICICI Bank, on its part, said, "The bank is currently not considering merger or acquisition of any bank."

Karnataka Bank has been the subject of takeover twice in the past, once reportedly by ICICI Bank and later by Kotak Mahindra Bank.

The rumour sparked huge trading activity in Karnataka Bank on the two exchanges on Tuesday, with about 109 lakh shares traded on the NSE and 21 lakh shares on the BSE. The share price closed at Rs 122.60 on the BSE, a gain of 1.49 per cent over Monday. The company will be filing its second quarter results on Wednesday.