Business

With merger of 5 banks, SBI emerges as top 50 in world

April 01, 2017 05:37 PM

New Delhi: The State Bank of India has merged its five Associate Banks - State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore besides Bharatiya Mahila Bank - with itself with effect from April 1.

With this six-way mega merger, the SBI has joined the league of top 50 banks globally in terms of assets.

Post merger, all customers of associate banks will enjoy the benefits of a wide array of digital products and services offered by the SBI

The total customer base of the bank is now expected to reach 370 million with a branch network of around 24,000 and nearly 59,000 ATMs across the country.

The merged entity will have a deposit base of more than Rs. 26 lakh crore and advances level of 18.50 lakh crore.

Post merger, all customers of Associate banks will enjoy the benefits of a wide array of digital products and services offered by the SBI.

 “With this six-way mega merger, the SBI has again displayed its ability to change and evolve in order to continue as the country champion among banks in India and to create enduring value,” the SBI said.

Welcoming all stakeholders of merged entities, SBI Chairman Arundhati Bhattacharya said the bank would strive to conclude the transition process within a quarter.

“The combined entity will enhance the productivity, mitigate geographical risks, increase operational efficiency and drive synergies across multiple dimensions while ensuring increased levels of customer delight,” she said.

Post merger, the bank will rationalise its branch network by relocating some of the branches to maximise reach.

This will help the bank optimise its operations and improve profitability, she said.

Integration of treasuries of the associate banks with the treasury of the SBI will bring in substantial cost saving and synergy in treasury operations, she added.

The government had in February approved the merger of these five associate banks with the SBI. Later in March, the Cabinet approved merger of the BMB as well.

The SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged with it.

The board of the SBI earlier approved the merger plan under which SBBJ shareholders will get 28 shares of SBI (Re 1 each) for every 10 shares (Rs 10 each) held. Similarly, SBM and SBT shareholders will get 22 shares of SBI for every 10 shares.

The SBI had approved separate schemes of acquisition for State Bank of Patiala and State Bank of Hyderabad. There will not be any share swap or cash outgo as they are wholly owned by the SBI.

 

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