India’s troubled Axis Bank rumored to be takeover target
Kotak Mahindra Bank chief Uday Kotak has revealed that he was 'open to sensible inorganic growth,' but refused to comment on Axis Bank rumors
Troubled Indian private sector lender Axis Bank, which reported a loss of 21.88 billion rupees (about US$329 million) in the quarter ended on March 31, may be acquired by Kotak Mahindra Bank, the second largest lender by market capitalization.
Uday Kotak, the managing director and chief executive officer of Kotak Mahindra Bank, revealed he was “open to sensible inorganic growth,” but refused to comment on rumors surrounding Axis Bank, the Financial Express reported.
In contrast to Axis Bank results, Kotak Mahindra reported a rise of 27% in consolidated net profit to 17.89 billion rupees for the quarter ended on March 31. Its net interest margin (NIM) of 4.35% is the highest in the industry. Rival HDFC Bank Ltd reported an NIM of 4.3% in the same quarter.
The Reserve Bank of India’s recent refusal to extend the term of Axis Bank CEO Shikha Sharma sparked speculation of a possible takeover.
The central bank had refused to approve the Axis Bank board’s proposal to grant Sharma a fourth three-year term and expressed concern over rising bad loans at the bank.