SBI says decision on merger of subsidiary in two days
   
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SBI says decision on merger of subsidiary in two days

Last Updated: Wednesday, August 21, 2013, 00:10
 
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SBI says decision on merger of subsidiary in two days
Mumbai: A top State Bank of India official Tuesday said the name of the suitable associate bank to be merged with the parent bank will be submitted to the management in the next two days.

"In the next two days, we will be informing the chairman of the name of the entity most suitable for the merger," managing director S Vishwanathan told reporters on the sidelines of an event here this evening.

Vishwanathan, who looks after SBI associates and subsidiaries, said by the end of September, he hopes that some decision to be made, after which it will go for regulatory approvals.

He, however, declined to comment when asked if a listed or an unlisted bank will be merged.

During the earnings announcement, chairman Pratip Chaudhuri had said a panel headed by Vishwanathan would be submitting their report on merger any time.

Vishwanathan said the employees of the merged entity will get the same benefit as SBI staff, including pension.

Announcing the first quarter earnings, chairman Pratip Chaudhuri had said the bank was in "advanced stage" of a decision and the name of the entity for merger would be finalised by September. Chaudhuri will demit office by the end of the next month.

He also discounted State Bank of Hyderabad as a probable candidate, saying the political situation over the moves of bifurcating Andhra restrict it from moving on the name. That leaves State banks of Jaipur and Bikaner, Mysore, Patiala and Travancore on the table.

Chaudhuri had been maintaining that merger of one of the five associates would cost up to Rs 2,000 crore and would be done during his tenure.

SBI's total capital adequacy stood at 12.12 percent as of June quarter, with the core tier-I capital at 9.01 percent. It is also expecting some infusion from the government this fiscal.

Through the merger, SBI--ranked in the lower 60s among the top banks in the world--can grow its balance sheet size.

SBI did the first amalgamation of one of its associates, State Bank of Saurashtra in 2008, followed by State Bank of Indore in August, 2010.

Meanwhile, when asked about the sale of the factoring business, which has been put on the block, Vishwanathan said the bank is fine with divesting 51 percent share SBI Factors.

Chaudhuri had been maintaining that merger of one of the five associates would cost up to Rs 2,000 crore and would be done during his tenure.

SBI's total capital adequacy stood at 12.12 percent as of June quarter, with the core tier-I capital at 9.01 percent. It is also expecting some infusion from the government this fiscal.

Through the merger, SBI--ranked in the lower 60s among the top banks in the world--can grow its balance sheet size.

SBI did the first amalgamation of one of its associates, State Bank of Saurashtra, in 2008 followed by State Bank of Indore in August 2010.

Meanwhile, when asked about the sale of the factoring business, which has been put on the block, Vishwanathan said the bank is fine with divesting 51 percent share SBI Factors.

PTI


First Published: Wednesday, August 21, 2013, 00:10


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