The State Bank of India said it has approved its merger with another two banks, State Bank of Patiala and State Bank of Hyderabad, taking the total of such banks to six.
Yesterday, the SBI had said it had approved its merger with four banks including State Bank of Mysore, Travancore and SBBJ.
“State Bank Of India has informed the Exchange that further to letter dated August 18, 2016, Central Board of bank at its meeting held on August 18, 2016 has also approved separate schemes of Acquisition of State Bank of Patiala and State Bank of Hyderabad by State Bank of India under section 35 of SBI Act 1955, subject to approval of the Reserve Bank of India and the Government of India,” it said today.
The share swap ratio will be announced shortly.
For the banks announced yesterday, the share swap ratios are as follows: 28 SBI shares for every 10 shares of SBBJ, 22 shares of of SBI for every 10 equity shares of SBM and SBT and 4.42 cr shares of SBI for every 100 crore shares of BMBL.
State Bank of India is India’s largest bank and has more than 14,000 branches. The merged entity is likely to have around 24,000 branches, out of which around 30% will be merged or shut down. The associate banks have a little over 70,000 employees, or 34 per cent of SBI’s employee base.
The merger announcement has been good news for investors in the banks’ stock, which has gained 39%, while shares of its listed associates have surged 26-43% ever since the merger was announced.
SBI has indicated it wants to complete the merger in 2016-17.
However, employees of the banks have opposed the merger tooth and nail fearing job losses.