Emirates NBD has emerged as one of the frontrunners to buy majority stakes in India’s IDBI Bank.
According to reports appearing in Indian media, Emirates NBD and Canada’s Fairfax Group have submitted their expression of interest (EOI) earlier this week to buy the 60.7 percent majority stake that is being offered by the Government of India and Life Insurance Corporation (LIC) of India.
The news comes just a few days following the revelation that Abu Dhabi-based First Abu Dhabi Bank (FAB) had seriously considered buying Standard Chartered Bank, before pulling out.
Leading financial website Moneycontrol quoted an anonymous source with knowledge of the sale process as saying: “Emirates NBD and Fairfax Group are amongst bidders who may have expressed interest in the first stage of the process and put in EOIs.”
The website said a second person confirmed the names of the two institutions and added that the prospective bidders may rope in partners at a later stage.
Another name in the bidding is the Luxembourg-based private equity firm CVC Capital Partners.
The Fairfax Group is owned by Indian-Canadian billionaire Prem Watsa. According to a Press Trust of India report, Fairfax had invested $7 billion in India so far and was looking to double it over the next 4-5 years.
The Secretary, Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, said in a tweet on Saturday that the government had received multiple EOIs for IDBI Bank and the sale process is now expected to move to the second stage.
The interested parties will now have to wait for the Reserve Bank of India (RBI) to vet the application received and determine if they meet the central bank’s ‘fit and proper’ criteria.
IDBI Bank has a pan-India presence with 1,940 branches, 1,416 centers and 3,343 ATMs. The market cap, as of Friday at the close of the stock market, was INR634.93 billion ($7.72 billion).
Industrial Development Bank of India (IDBI) has been in existence for over 55 years and played a crucial role in the country’s early periods of industrialisation as a development financial institution (DFI). It was transformed into a full banking company on October 1, 2004. It is now involved in the entire gamut of retail banking activities, while continuing to play a leading DFI role.
Emirates NBD has total assets of AED721 billion ($196 billion). The company declared its profits jumped 25 percent to AED9.1 billion ($2.48 billion) in the first nine months of 2022, close to the level reported for the whole of 2021. Q3 profit was exceptionally strong at AED3.8 billion, up 51 percent year on year. Currently, it has a staff strength of more than 28,000 people, representing more than 70 nationalities.
Formed in 1963 as the National Bank of Dubai (NBD), it merged with Emirates Bank International (EBI) in March 2007, to become the largest banking group in the region by assets. In October 2007, Emirates NBD shares were officially listed on the Dubai Financial Market (DFM). The group also operates Liv, the lifestyle digital bank for millennials.
In July 2019, Emirates NBD acquired DenizBank, the largest private bank in Turkiye, which expanded its presence to 13 countries and added over 17 million customers.
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