‘Bank managed substantial buying in‘post-Templeton’ debt market’
Responding to an analyst’s query on Tuesday (June 16), on the banks’ plans to grow inorganically, the managing director and chief executive of the bank, CVR Rajendran, said funds will not be a roadblock to an acquisition that makes business sense.
“That said, there is nothing on CSB Bank platform right now, but we are open to the idea of buying a bank or NBFC with right valuation if everything falls into place. We keep our eyes and ears open,” he added.
He also reminded that Prem Watsa, chairman of the Fairfax Holdings, the largest shareholder in the bank with close to 50 per cent stake, had already given his assurance that fund shouldn’t be viewed as a deterrent in case CSB Bank discovers a potential bank or NBFC worth looking at.
Rajendran didn’t hide his desire to grab any opportunity when the Central Government plans to sell public sector banks as part of its larger plan to consolidate the government interests in the public sector undertakings as announced by the Union Finance Minister Nirmala Seetharaman recently.
“Now the government is also willing to sell public sector banks, we have expressed our interest in that. The discussions are only at a preliminary stage… theoretical discussions are taking place, but nothing has moved to a meaningful stage,” he added.
A lowly bank, even for a small state like Kerala, until about two years back, CSB Bank (formerly Catholic Syrian) has now come of age and started talking the language of ‘big business’.
Though still small in size, CSB Bank, a well-capitalised bank with a capital adequacy ratio (CAR) of 22.5 per cent (highest among all Kerala banks), thanks to the Rs1200 crore investment made by Fairfax Financial Holdings, doesn’t hide its ambitions to fly high.
Deviating away from just being a conventional lender, the bank has started trying its hands on other asset classes too. The bank chief said CSB Bank was one of the largest buyers of the debt schemes in the market following the panic selling triggered by the Franklin Templeton turmoil a few months ago.
“We had borrowed about Rs1500 crore from the RBI’s long term repo window. This was an opportunity to bring down the cost of borrowing as a portfolio and this money has helped buy the debt schemes, which allowed us to make a good return,” he added.
CSB had launched an innovative gold loan product called Akshaya Gold Loan where the customer can surrender his/her gold with the bank whereby the bank gives the customer an acknowledgment on valuation and weight of the gold. The customer can draw money as per his/her requirement and the interest will be charged on the actual drawings only.
CSB Bank has already given a run for the gold loan companies’ money by scoring on their USP- the turnaround time. The customers are not only gaining on the interest, but can now conclude the deal within minutes, as claimed by the bank.