Also Read: Current mkt not suited for raising funds: Karur Vysya Bank
Though he says Karur Vysya Bank would like to maintain its own identity.
Below is the verbatim transcript of K Venkataraman's interview on CNBC-TV18
Q: Given the Reserve Bank of India (RBI) guidelines that we have seen on converting to wholly owned subsidiaries for foreign banks do you think we are likely to see Mergers and Acquisitions (M&A) activity on the back of that?
A: That is possible because of the condition of 25 percent branches in rural sector and if priority sector lending targets are in place the foreign banks or foreign bank subsidiaries would basically like to expand their presence through mergers or acquisitions. It is possible.
Q: Would your bank be interested if in case a foreign bank would have approached them hypothetically in order to actually possibly takeover the bank?
A: As you yourself said it is hypothetic question. These are decisions that shareholders and the board have to take, but our stance at the time is that we would like to maintain our identity.
Q: Now with many of these foreign banks having largely a level playing field how will it change the banking environment in India? Are we likely to see more competition? If you do see a greater presence of these foreign banks, if they increase their bank branch presence etc. whether it is by the M&A route or otherwise what will be the impact on the Indian banking system according to you?
A: Competition has always been there because foreign banks have always been present in India, but they have been operating in a very limited geography. If subsidiaries are set up and they want to give competition to Indian banks there are challenges because it is not going to be that easy. What can make a difference is if they bring in different business models and then maybe much more of technology and technology based services then what is available right now there could be a stiffening of competition. But in my view I think all the Indian banks whether in public or private sector are geared enough to meet any kind of competition.
Karur Vysya stock price
On November 07, 2013, Karur Vysya Bank closed at Rs 368.10, up Rs 0.50, or 0.14 percent. The 52-week high of the share was Rs 592.30 and the 52-week low was Rs 297.65.
The company's trailing 12-month (TTM) EPS was at Rs 48.95 per share as per the quarter ended June 2013. The stock's price-to-earnings (P/E) ratio was 7.52. The latest book value of the company is Rs 287.85 per share. At current value, the price-to-book value of the company is 1.28.
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