Fairfax to buy 51% in Catholic Syrian Bank for ~12 bn

Fresh deal after talks fell through last year

Canadian investor Prem Watsa’s Fairfax’s Indian arm Fairfax India Holdings will buy a 51 per cent stake in the Keralabased Catholic Syrian Bank for around ~12 billion.

The deal, if it materialises, will be the first takeover of an Indian bank by a foreign non-banking financial entity after the Reserve Bank of India (RBI) tweaked ownership norms last May.

The bank’s board on

Saturday approved

Fairfax’s proposal and both parties are expected to sign an agreement next week.

Catholic Syrian Bank

Chairman TS Anantharaman confirmed the development and said

Fairfax India Holdings

Corporation had formally indicated its continued interest in buying 51 per cent of the share capital of the bank at a mutually agreed price of ~140 per share.

“The investment is subject to customary closing conditions, such as completion of required legal documentation and receipt of all applicable board, shareholder and regulatory approvals, including the approval of the Reserve Bank of India and the Competition Commission of India,” he said.

Fairfax had said last year it was ready to invest up to ~10 billion in Catholic Syrian Bank for a 51 per cent stake, but the deal did not materialise due to differences over valuation.

Catholic Syrian Bank thereafter started looking at a new set of investors and met dozens of them. Finally, Fairfax has come back on board.

The Reserve Bank of India had last year issued its approval to Fairfax’s proposal. Now both parties must approach the banking regulator for a renewal of the earlier approval. This is easier for Catholic Syrian Bank than bringing in new investors and going back to the RBI for a fresh approval.

The bank is expecting to close the deal by March subject to regulatory clearances.

CVR Rajendran, managing director and chief executive officer, Catholic Syrian Bank, said the fresh capital would help the bank to double its balance sheet from ~250 billion.

“Catholic Syrian Bank has taken various initiatives in the last few years to reinvent itself in a highly competitive banking industry and the proposed Fairfax India investment will boost these efforts in a substantial manner,” he said.

Catholic Syrian Bank reported a profit of ~15.5 million in 2016-17 against loss of ~14.9 million a year ago.

“We will be a high quality SME bank and will focus on five to six states even after having a pan-India presence,” Anantharaman had said earlier.