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New Bank Merger on cards

Federal Bank and Lord Krishna Bank have confirmed their plans to consider the merger. Federal Bank has approved the acquisition in principle, but the details are would be known after due diligence and valuation.

Federal Bank, which posted 901 million rupees net profit last year, announced in August plans to raise 4.5 billion rupees ($102 million) through global depositary receipts.

Lord Krishna Bank posted a loss of 340 million rupees last year due to a hit to treasury operations from rising interest rates. Its interest income was 1.95 billion rupees and net bad loans stood at 4.12 percent as of March 31, 2005.

Federal Bank, with about 400 branches concentrated in the southern state of Kerala, would expand its reach across the country through the takeover since 55 of Lord Krishna's 112 branches are in the west and north.

The proposed deal would be the second acquisition in the sector this year after Centurion Bank Ltd. took over Bank of Punjab Ltd. in a deal worth $82 million.

READ RELATED BANK MERGER STORIES-

'Centurion Bank of Punjab'- Merger of Centurian & BOP
Global Trust Bank merges with Oriental Bank of Commerce

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