WYOMISSING, Pa., June 26, 2013 /PRNewswire/ -- Customers Bancorp Inc. (NASDAQ: CUBI) the holding company for Customers Bank, today announced it has formed a business collaboration with and will invest $51 million in the high growth financial institution Religare Enterprises Limited ("Religare"), which is one of India's leading diversified financial services companies and is applying for a banking license in India.
Mr. Jay Sidhu, Chairman and Chief Executive Officer of Customers Bancorp Inc., commented: "We are very excited about working with a high quality company like Religare Enterprises. We think there are mutually beneficial opportunities for both organizations to explore. Going forward, our management team's extensive banking experience will be available to Religare in its banking foray. We agreed to invest after doing research on investment opportunities in the financial services industry in India with the help of Dinodia Capital Advisors, and have negotiated what we believe are very attractive terms and covenants in connection with this investment. We feel comfortable with the growth prospects of Religare and its subsidiaries and affiliates, and look forward to a long term relationship with them."
Customers has agreed to invest $51 million, spread amongst the purchase of shares, both directly from Religare and separately from a promoter of the company, and the purchase of warrants.
James D. Hogan, Customer Bancorp's Chief Financial Officer, added, "We expect this collaboration and investment to provide well in excess of our current ROE on the capital being deployed and to enhance our long term earnings. Religare plans to be an important player in India, the third largest economy in the world and one of the least exploited banking markets in the world. Working with Religare, we also plan to set up a small group at Customers Bank catering to professionals from South East Asia and businesses who want to take advantage of opportunities in South East Asia. This is a rapidly growing niche in our markets from Boston to Washington."Mr. Sidhu added, "We are joining IFC, the private equity arm of The World Bank, in this very opportunistic investment and we hope to see positive effects on our earnings within the next few quarters. We are always looking for opportunities to add value to our franchise, better serve our customers and to create value for our shareholders. In the last few weeks we have completed extensive due diligence and have obtained unanimous board approval to move forward on the collaboration and investment process.