What are the pluses and minuses that banks that are bidding for UWB have to consider?
The main attraction is UWB’s branch network, especially in urban areas. The general impression about banking has moved away from interest-based impersonal banking to that of physical branch presence, which provides reach. More so, in SME (small and medium-sized enterprises) and retail, the largest focus areas. Since the RBI restricts banks from getting beyond a fixed number of branch licences each year, a bank acquisition would enable an acquirer to obtain the branches of the target. Further, given that UWB is listed, it is also a good opportunity for unlisted banks to fold in and get surrogate listing. I am surprised that banks like DCB have not bid along with some private investors (even foreign, given that UWB is primarily locally held), who could pump in capital. This would achieve the purpose of reviving UWB as well as listing of banks, which is now mandatory over a period of time. On the flip side, however, are the legacy operations of the banks and integration-related issues. Ke
