Federal Bank calls reports on merger talks with pvt bank 'speculative'

Kottayam: Leading private sector lender Federal Bank on Monday called media reports about it initiating merger talks with another private bank 'speculative'.

"We wish to clarify categorically that the news report of a merger between Federal Bank and another private bank is speculative in nature," the banks said in a notice issued to the exchanges.

"In this regard, we would like to state that there is no information available with the company as of today, which is required to be reported under extant SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and which may have a bearing on the stock price of the Company," the Aluva-headquartered bank added.

Earlier in the day, a business portal reported, quoting sources, that the bank was in talks with Kotak Bank for a merger.

Riding on the news, shares in Federal Bank rose to a high of 127.75 in early trades on NSE, before declining to 123.90 by 12.15 pm.

The bank was in news recently after it announced the inauguration of 15 new branches across the country. Among the new localities, seven were in Tamil Nadu taking the overall presence to 171 branches in the state.

As part of the expansion plan, it is focusing on Tamil Nadu, Telangana, and Gujarat, the bank then said.

Federal Bank reported 63.5 per cent increase in net profit for the quarter ended in June, aided by lower provisions and a healthy rise in net interest income. Its net profit rose to Rs 600.66 crore in Q1 compared to Rs 367.29 crore a year ago. This is the highest ever quarterly profit reported by the bank.

Interest earned for the quarter rose 8.14 per cent to Rs 3,628.86 crore, while net interest income stood at Rs 1,605 crore.