labels: M&A, Banks general
SBI eyes merger of associate banks; restates results news
19 May 2009

The State Bank of India (SBI), which kicked off its merger moves with the integration of State Bank of Saurashtra last year, will soon merge two of its larger subsidiaries -  State Bank of Patiala and State Bank of Hyderabad - with itself.

SBI, the country's largest lender, hopes to emerge one of the top 25 banks in the world with the merger of all its associates with itself "as quickly as possible", a top bank source told reporters.

The bank also said it has issued revised figures for its quarterly and annual revenue issued last week.

SBI expects to begin the merger programme with the integration of the State Bank of Patiala and the State Bank of Hyderabad as banking reforms get a fresh impetus with the UPA coming back to power at the centre without support from the Left parties.

''The merger process of State Bank of Saurashtra has already happened and the roadmap is to complete the consolidation process in the shortest possible period,'' an SBI source said.

SBI is waiting for the go-ahead from the new government, the official said, adding, the process could happen in the immediate future. 

SBP and SBH are wholly owned, larger, subsidiaries of SBI and have both put up impressive results in the last financial year.

SBI, meanwhile, corrected some figures in its quarterly and annual financial results announced last Saturday. SBI said the revisions were forced by typographic errors. In a stock exchange filing, however, SBI did not cite any reasons for the changes. The bank also said the revised numbers do not have any material impact on the results.

According to the revised numbers, during the fourth quarter of the last financial year, the bank's provisions for non-performing assets went up from Rs1,178.72 crore to Rs1,296.25 crore. As a result of the change, the provisions, went up by 21.49 per cent compared with last year's level of Rs1,066.98 crore.

There was, however, no impact on the level of net non-performing assets (NPAs), which were estimated at Rs9,552.02 crore, or 1.76 per cent of advances, at the end of March, 2009.

For the quarter, the annualised return on assets (RoA) was revised upwards to 1.10 per cent from 1.04 per cent reported earlier. The bank also said that the RoA at the end of the fourth quarter of 2007-08 was 1.10 per cent, compared with 1.01 per cent reported on Saturday.

The change was mainly in case of treasury income and those from corporate and wholesale banking, which were shown in the segment-wise results.

During 2008-09, the bank said, revenue from treasury segment was Rs 19,838.88 crore, as against the earlier shown figure of Rs 13,109.88 crore. Similarly, revenue from corporate and wholesale banking, which was earlier shown as Rs30,970.41 crore, has been revised to Rs24,241.41 crore. As a result of this, revenue from treasury accounted for 25.94 per cent of the bank's total income of Rs76,479.22 crore, instead of the 17.14 per cent reported on Saturday, an SBI release said.


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SBI eyes merger of associate banks; restates results