Axis Bank gets RBI nod for merger of Enam's investment bank biz

SOURCE : BL:MUMBAI, APRIL 22:

 

2011

Axis Bank has received the Reserve Bank of India's in-principle approval to merge the investment banking and equity capital market business of Enam Securities.

The RBI has, however, put conditions for the merger to go through. One of the conditions is that none of the Enam Securities shareholders, who have acquired Axis Bank shares through the share swap deal, can be on the board of the bank.

The private sector bank had moved the RBI to induct Mr Vallabh Bhansali, co-founder and Chairman of Enam Securities, on its board.

Following RBI's condition, the bank is now exploring ways of working with Mr Bhansali, said Mr Somnath Sengupta, Executive Director and Chief Financial Officer, Axis Bank. Speaking to the media while announcing the bank's fourth quarter results, Mr Sengupta said that the process of merger would take a couple of months to be completed. There would be no changes in the valuation of the transaction (merger of Enam), he added.

In November 2010, Axis Bank had announced that the investment banking and equity capital markets business of Enam Securities would be merged with Axis Securities and Sales Ltd, a wholly-owned subsidiary of the bank in all-share deal.

NET UP 33%

For the quarter ended-March 31, 2011, Axis Bank posted a net profit of Rs 1,020 crore, up 33 per cent from Rs 765 crore in the corresponding quarter last year.

For the full year 2010-11, the bank posted a net profit of Rs 3,388 crore (Rs 2,515 crore), up 35 per cent.

The growth was on account of increase in both net interest income and fee income, Mr Sengupta said.

For the year 2010-11 the bank has recommended a dividend of 140 per cent