Cosmos Bank plans to buy 5 more coop banks

PUNE: Cosmos Cooperative Bank, which has been on an acquisition spree, is looking at taking over five more urban cooperative banks (UCB) — three in Gujarat and two in Andhra Pradesh. The Pune headquartered multi-state cooperative bank has recently received proposals from five UCBs seeking voluntary merger, M L Abhayankar, chairman, Cosmos Cooperative Bank told ET.

Within a year’s span, Cosmos has acquired four UCBs — Secunderbad-based Premier Cooperative Urban Bank, Annapurna Mahila Cooperative Bank, Unnati Cooperative Bank and Cooperative Bank of Ahmedabad. Following these acquisitions, Cosmos now has 69 branches and 13 extension counters. Of its branch network, 23 branches (one-third) are in Gujarat.

While consolidation is a top priority for the bank, it is also keen on strengthening its presence in Gujarat through more acquisitions. Fresh acquisitions could happen after six months.

The Cooperative Bank of Ahmedabad (CBA), which is a sick bank, has 18 branches — 16 in Ahmedabad and two in Mumbai. It has a negative net worth of Rs 20 crore, outstanding loans of Rs 74 crore and cash and investments of around Rs 70 crore. The bank has recently received fresh deposits aggregating Rs 10 crore.

Baroda-based Unnati Cooperative Bank is a profit-making UCB with six branches. Annapurna Mahila Cooperative Bank is a unit bank with a negative net worth of Rs 20 lakhs. Cosmos has absorbed all the staff of the banks that have been merged with it. The merger scheme also entails repaying depositors of the banks that have been acquired by Cosmos.

The net worth of Cosmos Bank stood at Rs 428 crore as on March 31, ’05.Besides Cosmos, most of the leading UCBs — such as Saraswat Bank, Shamrao Vithal, Abhyudaya Bank — have opted for the acquisition route to expand their network. M&As have become inevitable because of the virtual ban by the RBI on fresh branch licenses. Saraswat Bank has acquired Maratha Mandir, while Mumbai-based Abhyudaya has bought Pune-based Citizens Cooperative Bank.There are 636 UCBs in the state with total deposits of around Rs 60,000 crore. However, one out of every five UCB is not financially sound.