Catholic Syrian Bank: Valuing a Majority Stake in a Commercial Bank
(5 pages of text)
Case (Pub Mat)
Fairfax Financial Holdings Limited (Fairfax), the Canadian insurance and investment company, made an offer in 2016 for a majority stake in the Catholic Syrian Bank Limited (CSB), a regional private bank in India. Despite its initial enthusiasm for the deal, the CSB rejected the offer because of low valuation. At the behest of the Reserve Bank of India, the CSB made a counter-offer to Fairfax for a majority stake at a substantially higher valuation. Should Fairfax take the offer?
This case can be used in a post-graduate business valuation course or in a graduate-level course on banking and financial services. The financial statements and analysis portion of the case can also be used in a financial accounting or financial statements analysis course to introduce students to a commercial bank’s financials. After studying the case, students will be able to do the following:
- Understand how the financial statements of a bank differ from those of non-banking and non-financial firms.
- Become familiar with financial ratios peculiar to banking and understand the limitations of traditional financial ratios in a banking context.
- Understand and apply business valuation approaches that are specific to banking firms.
Finance and Insurance
India, Large, 2017
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