Feb 16, 2017 05:06 PM IST | Source: Moneycontrol.com

SBI & associate banks shares soar 3-13% as Cabinet clears merger

State Bank of India has received Cabinet approval to merge its five subsidiaries, which will make the bank among top 50 banks in the world.

SBI & associate banks shares soar 3-13% as Cabinet clears merger
Moneycontrol Bureau

Shares of State Bank of India (SBI) and its listed associate banks (State Bank of Bikaner, State Bank of Mysore and State Bank of Travancore) gained 3-13 percent intraday Thursday on the back of approval from the Cabinet for their merger.

State Bank of India has received Cabinet approval to merge its five subsidiaries, which will make the bank among top 50 banks in the world.

Finance Minister Arun Jaitley on Wednesday said the Cabinet has approved the merger of the SBI and its five associate banks — State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT).

"A formal notification in this regard is awaited from Government of India wherein the effective date of merger will be indicated," SBI said in a statement.

The merged entity will create a banking behemoth, one-fourth of market share in India’s banking sector (in terms of loans and deposits), with an asset base of about Rs 40 lakh crore from Rs 23 lakh crore.

This is one-fifth the size of India’s gross domestic product (GDP) and more than five times the balance sheet size of ICICI Bank — India’s largest private lender.

The merger will boost the number of employees by further 64,000 employees of the subsidiaries making total employee strength of nearly 2.70 lakh from 2 lakh people across 23,000 branches. At present, SBI has about 18,000 branches, including 200 foreign offices spread across 36 countries, and about 62,900 ATMs.

At 09:27 hrs State Bank of India was quoting at Rs 273.20, up Rs 4.55, or 1.69 percent on the BSE.

SBBJ was quoting at Rs 752.45, up 4.80 percent, SBM was trading at Rs 589 up 4.87 percent and State Bank of Travancore was quoting at Rs 590.10, up 5.38 percent.

Posted by Rakesh Patil
Sections
Follow us on
Available On