Bank of Baroda to buy housing finance subsidiary of Central Bank of India

Bank of Baroda is in negotiation to acquire a majority stake in Central Bank Home Finance (CBHFL), the housing finance subsidiary of Central Bank of India. Central Bank of India owns 64 per cent stake in CBHFL, while the other promoters of the housing finance unit are HUDCO, UTI and National Housing Bank.

Central Bank could raise as much as Rs 250 crore for its 64 per cent stake in CBHFL. Central Bank had received capital infusion worth Rs 1,729 crore from the Central government during the current fiscal. India's home loan market is roughly growing at 25-30 per cent.

SBI Capital Markets has been appointed by Bank of Baroda and some other merchant banks such as IDBI Capital have been hired by Central Bank to act as advisers.

On the financial front, Bank of Baroda’s topline increased 0.5 per cent to Rs 10,485 crore in Q2FY17 as compared to the previous quarter. The bank’s operating profit too rose 1.73 per cent to Rs 6392 crore in Q2FY17 on a quarterly basis. Its net profit also increased 30.33 per cent to Rs 552 crore in Q2FY17 on a QoQ basis.

The share price of Bank of Baroda decreased by one per cent on the bourses in early trades and is trading at Rs 158.05.