New generation private sector IDFC Bank and non-banking financial company Capital First announced completion of their merger Tuesday,
Post all the requisite approvals, a new board has been constituted with V Vaidyanathan as MD & CEO and Rajiv Lall as part-time non-executive chairman. Vaidyanathan spoke to CNBC-TV18 following the merger.
“December 30th is the date when Capital First will stop trading, December 31st is the record date and about 15 days from then, stocks of IDFC Bank will be issued to shareholders of Capital First,” Vaidyanathan said on Wednesday.
“Our context is that, we are pretty strong on the asset side and this is an extremely strong momentum. The retail is now become close to 32 percent of the combined institution day one with the result of the merger – 32 percent of the assets has now become retail overnight. I think that is a big move because it diversifies and improves earning profile of the organisation. However, context is liabilities. So our key focus over the next year or two is going to be how to raise liabilities,” he added.
Talking about the financials, Vaidyanathan said, “Current account/savings account (CASA) as a percentage of deposits is close to 11 percent and CASA as a percentage of total borrowings including all borrowings is about 6 percent. It has to grow. So we have a simple way of doing it. Basically, we have to go out put out the branches. Currently, we have close to about 200 branches and of the 200 branches, just for the benefit of our viewers, close to about 100 are in urban areas and these are very focused towards raising liabilities. Close to about 100 are in the rural areas and they are focused on raising and building retail assets base today but together they are a very potent combination. In the next few years, we plan to add close to about 500 branches."
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