Lakshmi Vilas Bank to rope in large marquee investors apart from Clix

Loss-making private sector Bank, (LVB), today said that it is talking to a few more investors apart from the Clix Group.

Last month, LVB signed a letter of Intent (LoI) with Clix for the proposed amalgamation of Clix Capital Service Pvt Ltd and Clix India Pvt Ltd into the bank. Upon amalgamation, the shareholders’ investments in Clix Capital of about Rs 1,900 crore and assets worth Rs 4,600 crore, will be completely amalgamated with the bank. The due diligence process is currently underway

“In addition to the proposal from Clix Group, the Bank’s advisors, we are looking for few large marquee long-term investors as well in mutual consultation,” said the Bank management.

“Therefore, as per the current quick estimates of the advisors, after amalgamation of Clix Capital, the CET-1 of the bank might reach a reasonable threshold level stipulated under extant regulatory norms based on the present level of assets and capital,” said the Bank.

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The bank’s net worth (before DTA) stands at Rs 996.14 crore. Its total Capital Adequacy Ratio (CAR) as per Basel Ill guidelines, was 1.12% on March 31, 2020 as against 3.46% on December 31, 2019, and 7.72 % on March 31, 2019.

LVB’s loss before tax narrowed down to Rs 233.14 crore during the quarter ended March 2020 from Rs 499.96 crore, during the same period last year. Its total income dropped to Rs 629.75 crore from Rs 739.72 crore. Gross NPAs of the bank on March 30, 2020 expanded to Rs 4,233.31 crore from Rs 3,358.99 crore a year ago. In terms of percentage they rose to 25.39 per cent from 15.30 per cent. Net NPAs stood at Rs 1,387.85 crore versus Rs 1,506.29 crore last year. In percentage terms, however, they increased to 10.04 per cent from 7.49 per cent.

The bank had already shifted its lending focus from Corporates to MRC (MSME, Rural, Commercial) and Retail Segments. Hence, the restriction for lending to Corporates due to PCA did not have any impact on the bank.

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