SBI and associates merger

ur thoughts

 

It might be good for the shareholders of the associate banks, as they are moving to more stable bank. However, for sbi the earnings may improve but Npas will go up further. Might hurt the stock for sometime but in the long term it should good.

 

sbi market share will be more than 50% of indian banking industry. may become one largest bank in the world. for long term good pick.
Npa in % of assets will go down i think so. so win win for sbi shareholders. definite buy

 

700 crores will b saved by sbi in treasurey operations only. great for sbi holders.

 

It is good move unnecessary subsidiaries are created and expenditure is wasted on duplicating same thing.

 

Yes. But %age wise it is going to increase at first, because the banks which are going to merge in are going add lesser to the revenues and more to the NPAs.

 

This is not a wise move by the government unless there is thought given to improving productivity and efficiency that can be brought about by merging the banks (rationalizing of staff, reducing overhead expenditure, etc). Anyways it remains to be seen how things will proceed. Already unions have decided to go on strike. Simply merging subsidiaries on paper is not a good idea. SBI already owned them so what is the new value they can add ? Waiting for SBI's results and more concrete announcement on this merger front.

 

SBT is relatively good bank than sbi in npa and efficiency. Mahila bank also. so i think after merger things will improve for sbi. 50% market share of banking industry in india. sbi is a no brainer buy.any body holding.

 

With out NPA Problem there is no much use for this merger ...only employees adjustment and some infrastructure saving only ...but india need Hard Parliament acts against defaulters and hard punishments .... unless same story dubbing picture again in another language in banking industry .....

 

right sir . lawful action is compulsory against defaulters.
govt owning 27 banks is craziest thing to do for a govt.

 

Mergers are more likely to be disasters.... Whether in India or elsewhere. Only the mckinsey's of the world have the last laugh with the millions they make advising mergers/takeovers and the billions (often illusionary) savings that such mergers will bring about.

Somebody in here mentioned 700crs of treasury cost savings. Can this person throw some light on how this is like to occur

 

after merger treasury opr of this banks will be combined and total cost for managing tresury will be down by appr. 700 crores. sbi statement.

 

SBI statement : more likely a figure plucked out from a mckinsey ( or another ) presentation to FM or Govt than a well thought / worked out number. Anyways will wait for this probable event to occur hoping against the worst.

 

A good entry price for SBI would be Rs 125 and below...

A range of Rs 75 to Rs 95 would be a worthy investment....SBI coming below Rs 125 is guaranteed in the next one year but it is highly doubtful whether it will come to around Rs 70, it would be mouth-watering to invest at Rs 70 odd levels...

 

The day SBI comes to 70-75 I would sell everything to buy it. It is not going to happen. In my opinion this is good entry level. Lets hope the results are good.

 

Today I really agree with you. It is probably a figure just quoted from source whether McKinsey or IFMRRP. However I do have a question to you, the banking expert. I have watched the results of some banks like ICICI Bank. The bank made a provisioning by gaining on deferred tax liability. I am just curious how can a bank make a provision which is greater than its operational profit. I know banks and companies do a lot of financial jugglery but still provisions > operation profit leading to losses. So is this provision real ?

 

Mythili Bhusnurmath: Frankly the merger is not going to solve anything at all. The savings of the State Bank in fact are so marginal that it is not even worth talking about. If it was such a great idea, then why did not State Bank of India continue with the merger because they had merged two of their associates banks in 2008 and 2010. They clearly did not see too much of a benefit from it and had opted not to merge any further. So now like a good public sector bank, you have been given your signal from the finance ministry. Since the chairman is appointed by the government, if the government wants the merger to take place, SBI will comply. It is duly doing what it has been asked "to do" and are merging the banks, along with Bharatiya Mahila Bank (BMB) which was always a bad idea to begin with. It was launched by the previous UPA government with an eye on elections. It made no difference whatsoever because when you lend to a borrower, you do not bother about the sex of the borrower. You are bothered about the viability of the project you are financing. So it was a bad idea to begin with.

It will continue to be a bad idea and merging with SBI will not make a difference. So frankly, I think this is one of the political moves that the government has made and like all good public sector banks they have take their orders "again from the finance ministry." I do not see any logic whatsoever for the merger.

https://economictimes.indiatimes.co...peerless-mutual-fund/articleshow/52323292.cms

 

SBI associate banks' unions strike against merger

A section of employees of the five associate banks of SBI went on a one-day strike on Friday to protest the proposed merger with their parent bank.

The employees also called for nationwide strikes on June 7 and July 20.

"SBI management's arrogant and high-handed approach has forced an all-India strike at five associate banks," the All-India Bank Employees Association said in a statement late this evening and claimed full success of the strike.

"We will continue to oppose the merger move. This is a plan to hijack national assets. We also urge political parties to join us," the association said.

SBI has five associate banks --- State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank Of Travancore.

Read more at https://www.thestatesman.com/news/b...anks-unions-strike-against-merger/143673.html

 

Provisions being raised by gaining on DTL - really? Hearing it for the first time. Where have you observed this? And why cant a bank make a provision greater than its operational profit? Even just a Common sense understanding and not 'technical knowledge of banking' should suggest that banks should in case its required to be done. Besides No legislation which prescibes to bank that the provision cap is its operating profit

 

The point I was trying to make is that from where will the funds come to make a provision if the provisions are greater than operational profits and I am referring to ICICI Bank's results regarding deferred tax liability if you failed to read it.. btw Ricoh India will be suspended from trading...the auditors have found "serious irregularities" and nobody is willing to accept anything.