SBI's associate banks unlikely to merge this year

Posted By: Religare
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Country's largest public sector lender, State Bank of India (SBI) continues to face hurdles in merging its associate banks, said a media report adding that the consolidation may not happen this year.

SBI has already amalgamated two of its associate banks State Bank of Saurashtra in 2008 and State Bank of Indore in August, 2010.

Amid the ongoing global crisis and squeezing liquidity in the domestic markets, the lender has planned to merge rest of the associate banks also. There are five more associate banks of SBI including State Bank of Patiala, State Bank of Hyderabad, State Bank of Mysore, State Bank of Travancore and State Bank of Bikaner and Jaipur (SBBJ).

The merger would not just improve the capital adequacy ratio of the bank but also boost its valuations on the bourses.

SBI had posted nearly 200-time increase in profit at Rs 4,050.27 crore for January-March 2012 period owing to a sharp fall in provisioning for bad loans.

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