Shares of State Bank of Mysore jumped 19.99 per cent to Rs 657.45, State Bank of Travancore soared 19.75 per cent to Rs 573.50 and State Bank of Bikaner and Jaipur zoomed 19.23 per cent to Rs 714.95 on BSE. “One can expect efficiencies to be created from rationalization of branches, common treasury pooling and proper deployment of a large skilled resource base”, Mint reported, quoting SBI chairman Arundhati Bhattacharya.
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“Currently, no Indian bank features in the top 50 banks of the world”.
Brokerage Nirmal Bang said “for SBI there will be additional pension-related costs amounting to Rs 3,000 crore but from a long-term perspective the merger will lead to synergy, increased balance sheet strength and also cost optimisation via rationalisation of branches”. Apart from this the rise has basically recouped the losses these banks had suffered after the last time the proposal of merger appeared, but nothing happened.
Indradanush is a seven-pronged plan to revamp the public sector banks announced by the central government previous year. We believe that as the merger progresses the valuation discount between SBI and its associates will narrow and hence presents a good opportunity to buy into associates.
It is expected that the merger will not create any asset quality problem for the parent bank.
The government also gave its nod to SBI for acquiring Bharatiya Mahila Bank (BMB). It maintained the rating of the SBI at “buy” and increased its target price by 16% to Rs.250 a share. On Wednesday, the Union Cabinet approved the merger.
Inaugurating the conference, Mr. Balakrishnan said the LDF government would make a strong intervention to prevent the SBI takeover of the bank.
In addition, SBJJ, SBM and SBP are also listed with the presence of minority shareholders.
Country’s largest capital lender – State Bank of India (SBI) setup Rs. 200 crore fund for Fin-Tech environment start-ups.
The All India Bank Employees’ Association (AIBEA) has demanded the merger of five associate banks of SBI into one entity.
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“We would be looking at using the available financial technology platforms for cross selling of our banking products, while they might be competing with us on various sectors, on various other areas we can collaborate and help each other”, added Bhattacharya according to ET reports.
