Federal Bank Ltd. shares rose 3.59% to Rs 350.15 on Monday after Executive Director Venkataraman V told NDTV Profit that the lender was not in active discussions on any acquisition. Jana Small Finance Bank Ltd. shares fell 9.77% to Rs 442.65, trading near the day's low of Rs 424.40.
Federal Bank shares had closed at Rs 338 on the previous trading day and touched an intraday high of Rs 355.10. Jana Small Finance Bank shares had a previous close of Rs 490.60 and an intraday high of Rs 490.90.
The bank will continue to evaluate acquisition opportunities but remains focused on organic growth, Venkataraman said. “At this stage, there's no active consideration of any inorganic opportunity,” he said on Monday, adding, “We constantly evaluate opportunities on the inorganic because, as you know, we have stated our ambition to be a universal bank.”
His comments came amid speculation that the lender was considering a controlling stake in Jana Small Finance Bank, following a CNBC-TV18 report last month that the two lenders were at an advanced stage of discussions.
Venkataraman did not name any bank or identify a potential acquisition target.
“We do believe that small portfolio and small acquisitions always help us rather than something very big. So a string of pearls approach is something which we are looking at,” Venkataraman said, explaining the bank's approach to potential acquisitions.
He said Federal Bank would assess opportunities in businesses such as securities, wealth management and small and medium enterprises, provided a deal was accretive and aligned with its strategic objectives.
Federal Bank Sees 11% Advance Growth
Venkataraman said the bank was seeing 11% growth in advances and remained on track to meet its guidance for mid-teens growth. It could consider high-teens growth if business conditions improved.
He also expects net interest margins to improve, after a marginal impact from foreign currency non-resident (FCNR-B) deposits.
The bank recorded one of its strongest current account and savings account (CASA) performances in six to seven quarters, he said, adding that FCNR-B deposits were unlikely to have a significant impact on its business.
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