Centurion Bank flashes bright

Centurion Bank moved ahead in a rather limp market on Wednesday as the former promoter of the company plans on offloading stake at Rs 11.50 per share.

The news gave the private sector bank's scrip strength, as it spurted 5.88% to Rs 9 on BSE by 12:30 IST. Relatively high volumes of over 239,000 shares were recorded on the counter by then.

The rise today comes in contrast to a recent trend on the counter -in the 14 sessions between 22 January and 11 February 2003, the scrip shed 22.4% to Rs 8.50 from Rs 10.95.

Dev Ahuja, the former promoter of the private sector bank, plans to sell his stake in the bank at Rs 11.50 per share to Sabre Capital Worldwide and six others who have teamed up for a stake in the bank.

KPMG was reported to have conducted the due diligence for the buying parties, which included Sabre Capital Worldwide, a fund floated by Rana Talwar, the ex-chief executive officer of Standard Chartered Bank. Talwar has teamed up with six other players including Citi group and Chrysalis Capital. After the due diligence was conducted, the parties met over deciding price and that was fixed at Rs 11.50 per share.

Dev Ahuja currently holds around a 4.1% stake in the bank after he sold 5.3 million shares in the secondary market. He also had placed another 26.2% stake to Twentieth Century Finance, authorising them to sell that stake to a strategic investor.

Incorporated in June 1994, Centurion Bank was promoted by the erstwhile Twentieth Century Finance Corporation in association with Keppel Tatlee Bank (which was earlier Keppel Bank of Singapore). The bank's focus so far has been on growth-oriented, higher end, medium-sized and emerging blue-chip companies in the corporate sector through a variety of products and services. It also has a keen interest in the retail sector.

The bank is also into international businesses encompassing both fund-based and non-fund based assistance to corporate and institutional clients.

The bank provides various services like ATMs at all its branches, computer terminals at selected customers' premises, facility of operating account from any of the bank's branches, instant transfer of funds, speedy collection of instruments, etc. It is being positioned as a professionally managed bank with presence in all major financial and growth centres. It plans to increase its focus on retail customers and raise the portfolio of retail assets to 50% from the current 35%.

Centurion Bank has 57 branches, 17 extension counters, 135 ATMs and a strong retail base of around 500,000 customers.

For the third quarter ended 31 December 2002, the company registered a net profit of Rs 3.10 crore compared to a net loss of Rs 26.04 crore in the corresponding period of the previous year. Total income declined by 4.98% to Rs 124.23 crore (Rs 1.24 billion) from Rs 130.74 crore (Rs 1.3 billion) in DQ 2001.

As on 31 December 2002, promoters' holding in Centurion Bank was 44.2%, while the public, foreign entities and domestic institutions held 30.22%, 19.10% and 2.14%, respectively.