CCI Greenlights Merger Of Fincare SFB With AU Small Finance Bank
However, the merger is subject to the approval by the Reserve Bank of India.
Jaipur-based AU Small Finance Bank Ltd. has received approval from the Competition Commission of India to merge Fincare Small Finance Bank Ltd. with itself.
However, the merger is subject to the approval by the Reserve Bank of India, according to its regulatory filing.
"...Competition Commission of India vide its letter dated Jan. 23, 2024, has communicated that CCI in its meeting held on Jan. 23, 2024, considered and approved the proposed combination involving amalgamation of Fincare Small Finance Bank Ltd. into and with AU Small Finance Bank Ltd. under Section 31(1) of the Competition Act, 2002," the notification said.
In October, AU Small Finance Bank's shareholders had granted approval for the merger. The appointed date for the amalgamation is set for Feb. 1.
Through the merger, AU Small Finance Bank will be able to leverage on "significant complementarities" between the two lenders. This includes areas like branch network, product offerings, customer segments, pan-India distribution franchise, portfolio diversification, cross-selling opportunities and reduced funding cost.
Latest available data shows that Fincare Small Finance Bank has a total asset size of Rs 14,777 crore as of Sept. 30. And, that of AU Small Finance Bank stood at Rs 95,977 crore as of Sept. 30.
In the September quarter, AU Small Finance Bank's net profit rose 17% year-on-year to Rs 402 crore, on account of significant rise in other income. The bank's asset quality declined, with gross non-performing asset ratio rising 15 basis points to 1.91% on a sequential basis. Net NPA stood at 0.6%, up from 0.55% in the previous quarter.
Provisional figures for the December quarter show a 31% YoY rise in total deposit to Rs 80,120 crore, and a 20% on-year rise in gross advances. The bank's CASA ratio stands at 33% as of Dec. 31.
