An official announcement made on Saturday said that Boards of Directors of the two companies at their respective meetings approved a merger of Capital First with IDFC Bank.
"Pursuant to the merger which is subject to regulatory and shareholder approvals, IDFC Bank will issue 139 shares for every 10 shares of Capital First," IDFC Bank said in a statement.
"This announcement is pursuant to IDFC Bank's stated strategy of "retailising" its business to complete their transformation from a dedicated infrastructure financier to a well-diversified universal bank, and in line with Capital First's stated intention and strategy to convert to a universal bank."
According to the bank's statement, Capital First "brings with it a retail lending franchise with a loan book of Rs 22,974 crore (September 2017), a live customer base of three million customers; and a distribution network in 228 locations across the country growing at a five-year CAGR of 27 per cent on AUM and 40 per cent in profits, with gross and net NPA at 1.63 per cent and 1 per cent respectively".
Post-merger, the combined entity of IDFC Bank and Capital First will have an AUM (assets under management) of Rs 88,000 crore; PAT (profit after tax) of Rs 1,268 crore (FY 17); and a distribution network comprising 194 branches (as per branch count of December 2017 of both entities), 353 dedicated BC outlets and over 9,100 micro ATM points, serving more than five million customers across the country.
The statement added that V. Vaidyanathan, who is currently the Chairman and MD of Capital First, will succeed Rajiv Lall as MD and CEO of the combined entity upon completion of the merger and necessary regulatory approvals.
"On our part, we have always said publicly that a banking platform provides a stable diversified liability base and is hence critical for building a large franchise," Vaidyanathan was quoted as saying in the statement.
"We are excited about this merger because IDFC Bank provides a perfect platform for
continued growth of the combined franchise, supported by low-cost funding."
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
