Media reports suggest that Ind Bank Housing, the housing finance subsidiary of Indian Bank, may be merged with the parent company by the end of 2012-13, if all regulatory approvals fall into place.
Indian Bank wants to merge its housing finance arm because it would help bolster the bankÂ’s retail book, bringing specialist home finance employees, and also as it would help the bank with capital conservation in the long run.
Indian Bank would hire a consultant by end-December for this purpose. The bank has been intent on merging its housing finance arm with itself, but has not been able to make any serious progress on that front owing to various issues, including capital.
In the quarter ended September 30, Indian Bank Housing reported a loss of Rs 2.2 crore compared with a loss of Rs 6.8 crore a year ago. The last notice by the home finance company to the exchanges shows that Indian Bank held 76 per cent stake in Indian Bank Housing as on September 30.
The home finance companyÂ’s business has been hit by Indian Bank itself getting active in the home loan market, and also as the parent has access to public deposits, helping it price its loans cheaper than the arm.
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