Mangalore-based Corporation Bank is considering merger of its housing finance arm Corporation Bank Homes with itself.
The bank's board of directors will discuss, among other things, the proposal for merger of its home finance subsidiary with itself at its meeting on December 27, Corporation Bank informed the Bombay Stock Exchange on Monday.
The move comes after other major PSU banks like State Bank of India, Canara Bank and Andhra Bank decided to merge their home loan arm.
Many housing finance companies are facing declining income as the banks are able to offer funds at a much cheaper rate.
Taking advantage of low cost deposits, Corporation Bank is aggressively selling its home loan product although its home finance arm is witnessing a decline in profits.
CorpBank Home witnessed a decline in net profit at Rs 5.63 crore (Rs 56.3 million) last fiscal from Rs 6.5 crore (Rs 65 million) in the previous year, bank sources said.
The retail assets of the bank would increase after the proposed merger of CorpHome Ltd, which had assets worth Rs 304 crore (Rs 3.04 billion) till March 2004.
