25 August 2004
MUSCAT-- BankMuscat yesterday said it has picked up 75 million shares worth Rs300 million in India's Centurion Bank's rights issue, raising its stake in the latter to 33 per cent from 26 per cent.
The bank, which had recently signed an MoU with the Indian bank to jointly explore opportunities in the NRI business segment, bought the shares at Rs4 per share, BankMuscat sources confirmed to Times Business.
Of late, BankMuscat merged its one-branch operation in India, Bangalore, with the Centurion Bank. In line with the $15 million deal, BankMuscat picked up a 26 per cent stake in Centurion Bank and the Bangalore branch merged with the latter. The net additional investment in India was only $5 million. In fact, it is a group of investors led by Sabre Capital Worldwide, including BankMuscat that acquired the 66 per cent stake in Centurion Bank.
Sheikh AbdulMalik bin Abdullah Al Khalili, chairman of the bank had told Times Business that the bank had invested $10 million as capital for the Bangalore branch.
If the bank had to expand and open another branch, it would have involved an additional capital of $10 million. Therefore, to have two branches, we would need an investment of $20 million.
He said during the last five years or so, the bank had realised that in India, which is a vast country, two or three branches would not give any strength in terms of reach and customer-base.
"We had also realised that the non-resident Indian business that could be generated out of Oman would be limited because of the limited branch network," the bank chairman said.
In fact, the bank had been exploring opportunities to expand its presence in India for a long time through a wider network and at the same time have its risk limited as well as an exit route opportunity available for the investment. The opportunity came in the form of Centurion Bank, which is a listed bank, which has a wider network of 60 branches, 139 ATMs and presence in 44 cities.
MUSCAT-- BankMuscat yesterday said it has picked up 75 million shares worth Rs300 million in India's Centurion Bank's rights issue, raising its stake in the latter to 33 per cent from 26 per cent.
The bank, which had recently signed an MoU with the Indian bank to jointly explore opportunities in the NRI business segment, bought the shares at Rs4 per share, BankMuscat sources confirmed to Times Business.
Of late, BankMuscat merged its one-branch operation in India, Bangalore, with the Centurion Bank. In line with the $15 million deal, BankMuscat picked up a 26 per cent stake in Centurion Bank and the Bangalore branch merged with the latter. The net additional investment in India was only $5 million. In fact, it is a group of investors led by Sabre Capital Worldwide, including BankMuscat that acquired the 66 per cent stake in Centurion Bank.
Sheikh AbdulMalik bin Abdullah Al Khalili, chairman of the bank had told Times Business that the bank had invested $10 million as capital for the Bangalore branch.
If the bank had to expand and open another branch, it would have involved an additional capital of $10 million. Therefore, to have two branches, we would need an investment of $20 million.
He said during the last five years or so, the bank had realised that in India, which is a vast country, two or three branches would not give any strength in terms of reach and customer-base.
"We had also realised that the non-resident Indian business that could be generated out of Oman would be limited because of the limited branch network," the bank chairman said.
In fact, the bank had been exploring opportunities to expand its presence in India for a long time through a wider network and at the same time have its risk limited as well as an exit route opportunity available for the investment. The opportunity came in the form of Centurion Bank, which is a listed bank, which has a wider network of 60 branches, 139 ATMs and presence in 44 cities.
© Times of Oman 2004
