Shares of State Bank of India gained nearly 4 per cent on Wednesday, while its subsidiaries State Bank of Travancore, State Bank of Bikaner and Jaipur, and State Bank of Mysore hit upper circuit after the Cabinet approved the merger of five associate banks with the country’s biggest lender.
Shares of State Bank of Mysore closed 20 per cent up at Rs 547.90. State Bank of Travancore and State Bank of Bikaner and Jaipur settled 19.99 per cent up each at Rs 478.90 and Rs 599.60, respectively.
Read more: SBI merger with associates to boost market share: Arundhati Bhattacharya
Shares of State Bank of India surged 3.90 per cent to Rs 215.65, whereas the BSE Bankex index advanced 1.38 per cent to 20,525.10.
Arundhati Bhattacharya, chairman, SBI said, “The merger of SBI and its associate banks is a win-win for both. While the network of SBI would stand to increase, its reach would multiply. One can expect efficiencies to be created from rationalisation of branches, common treasury pooling and proper deployment of a large skilled resource base. Currently, no Indian bank features in the top 50 banks of the world. With this merger, some visibility at global level is likely to increase. Customers of associates and subsidiaries of the bank will also be beneficiaries. Any introduction of new technology by SBI would simultaneously be available uniformly. The scale of operations and common cost would get rationalised. Overall, the synergies being pooled at one place are going to be a big positive.”
Last month, SBI cleared proposal for merger of subsidiary banks and Bharatiya Mahila Bank. It sought governments approval for the merger.
(With agency inputs)