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Bank Of Baroda Shares Jump As Merger To Create India's Third Biggest Bank Comes Into Effect

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As the merger of Dena Bank and Vijaya Bank with Bank of Baroda comes into effect on 1 April 2019, shares of BoB jump close to 4 percent to touch an intraday high of Rs 134.25 apiece.

 

The amalgamation will create the third-largest bank in India after SBI (State Bank of India) and ICICI Bank. It will have a reach of over 9,500 branches and more than 13,400 ATMs with 85,000 employees that are serving 120 million customers. Together, the new entity will have deposits of Rs 8.75 lakh crore, and advances of Rs 6.25 lakh crore.

BoB Shares Jump As Merger To Create India's Third Biggest Bank Comes Into Effect

The reach of Bank of Baroda in South India will also expand. "The complementary branch presence will add to the network in western and southern states - Maharashtra, Gujarat, Kerala, Tamil Nadu, Karnataka and Andhra Pradesh. The bank will have a 22 per cent market share in Gujarat and an 8-10 per cent market share in Maharashtra, Karnataka, Rajasthan and Uttar Pradesh," it said.

Customers of all the three banks will benefit from the amalgamation. While Dena Bank, that was under the prompt corrective action (PCA) of the RBI, will get access to credit facilities that were momentary discontinued under the framework, BoB's international presence and Vijaya Bank's unique programmes (like SRTO funding, plantation financing) will now be available for all the customers.

 

The wider range of products and better market penetration are expected to result in increased revenue and fee income.

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