Fincare Small Finance Bank Merges With AU SFB; Balance Sheet To Cross Rs 1.2 Lac Cr

The largest SFB in India, AU Small Finance Bank (AU SFB), announced today the merger of Fincare Small Finance Bank (Fincare SFB) with and into AU SFB, in compliance with the Reserve Bank of India's (RBI) authorization dated March 4, 2024. Through the use of digital capabilities, complementing geographic footprints, and a range of client groups with a wider range of offerings, this merger assists AU SFB in building a strong pan-Indian retail banking brand.

The RBI gave the merger its final authorization on March 4, 2024, with an effective date of April 1, 2024. The all-stock merger transaction was initially announced on October 29, 2023, and the shareholders of Fincare SFB got 579 equity shares in AU SFB for every 2,000 equity shares held in Fincare SFB. The Competition Commission of India (CCI) approved the merger earlier on January 23, 2024, in accordance with Section 31(1) of the Competition Act, 2002.

With a combined base of over 1 crore customers, over 43,500 employees, and a network of over 2,350 physical touchpoints across 25 states and union territories, AU SFB has become a formidable banking franchise as a result of the merger deal. As of December 31, 2023 on a proforma basis, the bank had a deposit base of Rs 89,854 crore and a balance sheet size of Rs 1,16,695 crore.

Mr. Rajeev Yadav, the previous MD and CEO of Fincare SFB, has been appointed as the Deputy CEO of AU SFB as a result of this merger, and he will continue to oversee all of the key asset businesses of Fincare SFB, which are now housed under the AU SFB Fincare Unit. The "Fincare Unit" will become the sixth business group of AU SFB, which recently reorganized its activities into five. The Executive Director of AU SFB, Mr. Uttam Tibrewal, has also been promoted to the position of Deputy CEO and Executive Director.

Following the merger, all 59 lakh+ Fincare SFB customers will have access to and be able to experience the flagship products and best-in-class digital services (assets & liabilities) of AU SFB, including credit cards, QR codes, video banking, and AU0101. It is anticipated that the merger would also provide AU SFB better access to South India, greatly extending its network of distribution. The bank's diversified range of products and services will be quicker to distribute to a larger client base thanks to this enlarged presence, which will improve its standing in the regional marketplace.

Mr. Sanjay Agarwal, Founder, MD & CEO of AU Small Finance Bank, remarked, "Today marks a significant milestone in our journey of building a 'Forever Bank' and I take this opportunity to welcome the customers, shareholders, and employees of Fincare to AU family. This merger represents not just the amalgamation of two entities, but the convergence of our shared vision to redefine banking excellence in India. I would like to thank the Government of India and the Reserve Bank of India and all other regulatory authorities for their blessings and expeditious approval process."

"With this integration, I assure them of building a well-governed, always compliant and a stronger retail banking franchise that will, over the coming decades, contribute to the growing India story. This merger underscores our commitment to financial inclusion and with our combined strength, we can serve all segments of customers, including low-income households, HNIs as well as MSMEs, through physical and digital channels both, offering a holistic bouquet of products, including cross-border business that will get launched soon under the Authorized Dealer - Category I license (AD Cat-I)," he further added.

Following the merger, the AU SFB Balance Sheet is expected to surpass about Rs 1.2 Lac Crores and transform into a pan-Indian banking organization, boasting over 1 crore clients and 2,350 physical touchpoints. Nine states would have over 100 physical touchpoints. In the next nine to twelve months, the bank also aims to ensure smooth and seamless integration and provide clients with best-in-class banking services and value.