Source: News Bharati English19 Aug 2016 16:42:33
New Delhi, August 19: State Bank of India approved merger with five associate banks and Bharatiya Mahila Bank (BMB) with itself. The merger which was announced in May, was approved by the Union Cabinet in June. SBI plans to complete the merger by the end of current 2016-17 fiscal year. After the announcement, the SBI shares jumped nearly 5% on Friday.
Of SBI's five associate banks, three - State Bank of Bikaner and Jaipur (SBBJ), State Bank of Travancore (SBT), State Bank of Mysore (SBM) - are listed. The merger involves allotting 28 shares of SBI for every 10 shares in SBBJ and 22 shares of SBI for every 10 shares held in SBM/SBT.
The merger will lead to just 1.7 per cent equity dilution for SBI. However, it will transform SBI into a bank five times the size of its private sector competitor ICICI Bank. SBI is expected to break into the list of world's top 50 banks with a balance sheet of Rs 37 lakh crore. Currently, no Indian bank features in the top 50 banks of the world.
Post the merger, SBI will likely break into the list of the world's top 50 banks by asset size. After the merger with five associate banks and Bharatiya Mahila Bank, the combined entity will have 23,762 branches across India, advances of Rs 18 lakh crore and deposits of Rs 23 lakh crore. Chairman Arundhati Bhattacharya said both the customers and the bank will gain.
The borrowers will get a finer pricing and I am hoping that all customers will get the benefit of the many new offerings that we are bringing. So, be it wealth management or better risk practices, the products that we are innovating regularly, all of those things we will be able to deliver to the customer within quicker timelines. Hopefully, we will be able to deliver much better experience to the customers of associate banks.