Bank of Baroda to buy Central Bank’s housing finance arm
Looking to strengthen its position in the home loan segment, Bank of Baroda is in talks to buy a majority stake in Cent Bank Home Finance (CBHFL), the housing finance subsidiary of Central Bank of India.
“Talks are at an advanced stage. Central Bank has agreed to sell its entire stake to BoB,” a source told.
According to sources, BoB has appointed SBI Capital Markets, while Central Bank has engaged a couple of merchant bankers including IDBI Capital as advisors.
CBHFL was incorporated as Apna Ghar Vitta Nigam and was subsequently renamed as Cent Bank Home Finance. It began operations in June 1991.
Investment bankers say Central Bank could get Rs 250 crore for its 64 per cent stake in CBHFL.
The deal is part of Central Bank’s attempt to shore up its bleeding balance-sheet, which has been mauled by mounting bad loans since the past few years. The cash-strapped government had earlier this year asked its banks to sell noncore assets to beef up core capital.