HDFC Bank eyes Corporation Bank

calcutta: the banking sector seems to be under the grip of hysteria over mergers and acquisitions. corporate sources, talking to toins, disclosed that pending finalisation of the merger talks with the private sector karur vysya bank of tamil nadu, the hdfc bank was simultaneously talking to the public sector corporation bank for a possible merger and to bring it under its fold.sources said that the talks between hdfc bank and corporation bank have "progressed fairly". asked to comment on how hdfc could negotiate with corporation bank while holding talks with karur vysya bank as well, sources said "under the present circumstances, it's the question of which one clicks first". they said "icici bank was initially negotiating with centurion bank for merger but finally the deal was settled with bank of madura". if corporation bank is merged with hdfc bank then it would be the first public sector bank to be merged with a private one. there are several common features between corporation bank and karur vysya bank. both are based in south and have their credit exposure primarily to the trading community rather than being into industrial credit. the level of non-performing assets (npas) of both corporation bank and karur vysya bank are low and have a noticeable presence all over the country. with the introduction of bank privatisation bill in the lok sabha, the bank stocks have surged in the market. the corporation bank has already tapped the capital market a couple of years back and has a staff strength of over 15,000. sources said that while the top management of both karur vysya bank and hdfc bank were negotiating for the last couple of months over the merger, the talks between hdfc and corporation bank is a more recent development. whether it is karur vysya or corporation bank, hectic activities are reported at the hdfc bank, poised to give a stiff competition to the icici bank. sources pointed out that more mergers are expected to be take place in the banking and finance sector as "the existing market can not cater to so many players. instances of merger of bank of madura with icici bank will become the order of the day as the small and localised banks will find it difficult to sustain the competitive market, while on the other hand such mergers will give synergy to the bigger private players operating in the market". it might be pointed out that both icici bank and hdfc bank have focussed on retail and net banking and are completely information technology driven.