Federal Bank Blog

Unofficial Federal bank Blog. This blog is created for investor's information only,information on this blog may or maynot be correct.

Saturday, February 04, 2006

UBS, EFF acquires stake in FedBank

UBS Securities Asia Ltd, the Hong Kong-based investment arm of the Swiss financial power house, UBS, and Emirates Family of Fund (EFF) promoted by the UAE-based Emirates Bank Group (EBG), have picked up less than 5% stake each in Federal Bank Ltd from the open market. This assumes significance as it comes at a time when ICICI Bank, the single largest stakeholder in the Kochi-based bank, is divesting its stake in tranches to bring down its holding to less than 5% to comply with the Reserve Bank of India (RBI) norms. Federal Bank does not have a domestic or foreign promoter and ICICI Bank originally held over 21% stake in the bank. It has recently diluted close to 10% stake in Federal Bank in the open market and leading foreign institutional investors FIIs) Goldman Sachs Investments and Kuroto Fund had picked up a sizeable chunk of its shares.

UBS Securities had acquired 31,48,944 shares aggregating 4.81% stake of the FedBank from the open market. UBS has reportedly bought these shares in tranches at market prices. Similarly, the EFF has also bought 22,54,20 floating shares aggregating 3.44% of the Federal Bank through open market operations. Following this, the total FII holdings in the bank has touched 26.43% in the December quarter compared to 15.5% in the previous quarter. UBS and EFF have been buying Federal Bank stocks for quite some time. UBS will have to soon make a public announcement as per the Sebi guidelines about its positions in the counter as its holding may soon cross the 5% mark. UBS is seen as a strong contender for a controlling stake in Federal Bank. Rumours were also doing the rounds that the UAE-based Emirates group was keen to get a controlling stake in Federal Bank, which has substantial business from the non-resident Indians (NRIs living in the middle east). Federal Bank is one of the largest old generation private banks in the country. It has clocked a profit of close to Rs 72 crore for the quarter ended December 2005 over a turnover of Rs 352 crore.

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