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| SBI mulling merger of other associate banks |
| Press Trust of India / New Delhi Sep 05, 2010, 13:15 IST |
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State Bank of India (SBI) is considering the merger of all five of its remaining associate banks with itself, having amalgamated with two of them in the last two years.
"It (merger of other associate banks) is in my mind, but we have to see," SBI Chairman O P Bhatt told PTI.
"We have to check out from the government and the banks concerned," he said.
The merger of State Bank of Indore, the smallest associate bank, was completed last month. All 503 of State Bank of Indore's branches, including 437 core banking branches and 66 outlets for NRI services, became a part of SBI from August 26, 2010.
The merger would avoid competition between the two entities and would give State Bank of Indore easier access to funds at competitive rates, compared to what it would have managed on the basis of its own growing balance sheet.
This was the second merger of an associate bank with SBI after a similar exercise with State Bank of Saurashtra in August, 2008.
Following the merger, SBI is left with five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
Among these, the State Banks of Bikaner and Jaipur, Mysore and Travancore are listed companies.
For 2010-11, State Bank of India is aiming at a 20 per cent growth in net profit.
"Quarter one was 25 per cent. We can do 20 per cent (this fiscal). That is what we would try to achieve... We will try to maintain this growth as far as possible," Bhatt had said.
The country's largest bank had reported an over 25 per cent growth in net profit to Rs 2,914.20 crore for the first quarter ended June, 2010, despite an increase in bad debts.
The rise in net profit was mainly due to a three-year high net interest income and a decline in the cost of deposits and savings.
Net interest income rose by 45.35 per cent during Q1, compared to the same quarter a year ago. Growth in net income was 4.30 per cent in June, 2009.
In addition, SBI's operating profit zoomed 66.97 per cent in the first quarter. It had declined 7.28 per cent in the corresponding quarter of the previous year.
A fall in treasury income and a rise in provisions against bad debt, among others, pulled down SBI's profit growth last year. The bank had recorded a meagre 0.4 per cent rise in net profit to Rs 9,166.05 crore in the last fiscal. The bank's total income rose to Rs 85,962.07 crore in FY'10, compared to Rs 76,479.2 crore in FY'09.
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