Centurion Bank of Punjab merges with Lord Krishna Bank

Mumbai, Sep 4 (UNI) The board of directors of Centurion Bank of Punjab (CBP) and Lord Krishna Bank (KKB) today approved the merger of the two respective banks.

The proposal is subject to all the requisite statutory, regulatory and shareholder approvals, including the approval of the Reserve Bank of India (RBI), a joint press release issued by both banks said.

Mr Rana Talwar will be the chairman and Mr Shailendra Bhandari the MD&CEO of the merged entity. It is proposed that Mr Mohan Puri would join the board of CBP subject to regulatory approvals, the release informs.

The share swap ratio has been fixed at 5:7 i.e. for every 5 shares of LKB, its shareholders will receive 7 shares of CBP. Ambit Corporate Finance and DSP Merrill Lynch are the advisors to both the banks, the release disclosed.

M/s Deloitte Haskins&Sells and M/s N M Raiji&Co are the independent valuers appointed jointly by both banks to determine the swap ratio for the merger.

The Chairman of CBP, Mr Rana Talwar said, ''The proposed merger with LKB firmly establishes Centurion Bank of Punjab's role as an industry consolidator. The merger of Bank of Punjab with the erstwhile Centurion Bank has been an unqualified success, we are confident that the proposed merger will accelerate the bank's growth momentum and help it move towards becoming the best full service bank in the country''.

Welcoming the merger, the director of LKB, Mohan Puri, said, ''The proposed merger is in the best interests of all the stake holders, i.e. customers, employees and shareholders as all of them would greatly benefit from being part of a larger, rapidly growing bank. CBP is fully committed to look after employees' interest, which was one of the key considerations while choosing the merger partner, he added.

The MD&CEO of CBP, Shailendra Bhandari, said, ''This merger will provide us with an opportunity to build on our strengths in Kerala and the rest of India enhanced by the top quality branch network that LKB has across the country.

Currently, CBP is serving the State of Kerala through its 14 branches. As on June this year, the bank had a credit-deposit ratio of 80 per cent in Kerala, which was significantly higher than the industry average of 66 per cent in the state of Kerala. Post merger the combined entity will emerge as one of the dominant players in Kerala and would build upon the inherent strengths of LKB,'' he added.

As part of the integration of both banks, it is envisaged that there will be no retrenchment of staff of either bank and there will be no closure of any rural branches. Additionally, the scheme of amalgamation provides for a one-time increment to all existing employees of LKB, the release informs.

CBP will have an extraordinary general meeting (EGM) of its shareholders on September 30 and LKB would have its Annual General Meeting (AGM) of its shareholders on the same day. Both banks will seek approvals for the merger from their respective shareholders at these meetings, the release disclosed.

The board of directors of CBP also approved a proposal to raise additional capital through a preferential issue of fresh equity. This approval is subject to shareholder, regulatory and statutory approvals as applicable, the release added.

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