Mid-size banks may be new M&A magnet

South-based mid-tier banks continue to be closely tracked by global investors seeking growth opportunities.

- 

Mid-sized banks remain inherently attractive to foreign investors due to their untapped growth potential, bankers quoted above said.

and Federal Bank remained unanswered till press time.

“If platforms are built, capital will follow,” Diwanji said.

Mid-sized banks remain inherently attractive to foreign investors due to their untapped growth potential, bankers quoted above said.

Most of these banks also maintain healthy capital buffers. As of the September quarter, DCB Bank reported a capital adequacy ratio of 16.41%, South Indian Bank 17.70%, Karnataka Bank 20.84%, Tamilnad Mercantile Bank 30.96% and Karur Vysya Bank 16.58%—all well above the RBI's minimum capital-to-risk weighted assets ratio (CRAR) requirement of 9%.

“These are established brands that have not chased aggressive growth,” said Vivek Iyer, partner and national leader, financial services - risk advisory, at Grant Thornton.