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Last Updated : Jun 16, 2016 07:47 AM IST | Source: Moneycontrol.com

Cabinet approves merger; SBI subsidiaries rally 19-20%

In an earlier report, HSBC had said that the proposed merger would expand SBI‘s standalone balance sheet by 28 percent to over Rs 28,50,000 crore or USD 400 billion with a negligible contribution from Mahila Bank.

 
 
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Moneycontrol Bureau

Shares of State Bank of India’s subsidiaries jumped 19-20 percent while the parent company gained 2 percent intraday on Thursday as merger plans has gathered steam. State Bank of Bikaner and Jaipur jumped 19 percent while both State Bank of Travancore and State Bank of Mysore rallied 20 percent. According to CNBC-TV18 the Cabinet has approved merger of five associate banks with SBI today. However, it is still not clear if Mahila Bank merger is approved.

In an earlier report, HSBC had said that the proposed merger would expand SBI’s standalone balance sheet by 28 percent to over Rs 28,50,000 crore or USD 400 billion with a negligible contribution from Mahila Bank. The merger would also increase SBI’s network by 41 percent to 23,000 branches, while its workforce would increase by 33 percent to 285,500 employees. The share swap ratio has not been announced, but with SBI owning a significant stake in most of these banks, it is not likely to be material.  The merger is expected to create a combined customer base of 50 crore.

Last month, SBI Board had approved proposal for merger of its five subsidiary banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad - as well as the Bharatiya Mahila Bank and sought the government's approval for the same.


Among the subsidiaries, only the State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed.



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First Published on Jun 15, 2016 01:45 pm
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