Canara Bank looks to hire merchant bankers for sale of noncore assets

Canara Bank plans to hire merchant bankers to advise as well as help the lender manage the process of selling stake in some of its assets, which are not core to business. The idea behind divestment of non-core assets is to unlock the value of its strategic investments, according to a tender on the bank’s website.

Canara Bank has sought bids and plans to empanel a minimum of three bankers who will procure the maximum valuation for its stake in various non-core assets as well as scout potential buyers.

The bank has eight domestic arms, including Canbank Financial Services Ltd, Canbank Factors Ltd, Canara Robecco Asset Management Company Ltd, and Canara HSBC Oriental Bank of Commerce Life Insurance Ltd. It has 30% stake in listed entity Can Fin Homes Ltd and sponsors two regional rural banks.

The bank did not specify the details of the divestment process.

With this, Canara Bank joins other lender such as SBI and IDBI Bank who also have plans to monetise non-core assets in a bid to strengthen the capital base.

Banks are in need of capital to not only meet regulatory and business requirements but also for cleaning stressed loans from their balance sheets, which would force them to keep aside money in the form of provision, according to analysts.

Indian banks need additional capital of $65 billion to meet Basel-III capital norms, which will be fully implemented from the end of March 2019, Fitch Ratings said on September 12.

MUMBAI: