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In Focus: Intrinsic Worth

CBoP may soon give company to the big boys after Basel-II norms come into force

Centurion Bank of Punjab is among those new-age banks that have grown from strength to strength. The bank - which was formed after the merger of the erstwhile Centurion Bank and the Bank of Punjab - enjoys high net interest margins (NIMs) in the banking industry. Gujarat Ambuja Cements promoter Narottam Sekhsaria recently bought around 4 crore shares in the bank through its arm Radha Madhav Investments for Rs 98 crore.

Citigroup's venture capital arm has also picked up a stake in the bank, which points to the strong potential of the bank.

The bank more than doubled its net profit for the first quarter ended June 30, 2006 to Rs 28 crore from Rs 11 crore in corresponding period last year. (Figures are not comparable as the previous quarter figure is only for Centurion Bank).

The bank is expanding. It has got licences to open more branches throughout the country. It will also address the SME and retail sectors once the new branches get operational. The bank is expected to enter the league of big boys once the Basel-II norms come into force. The Basel II accord offers specific standards for minimum capital requirements for banking operations including capital adequacy, supervisory review and market discipline.