Canara Bank, Syndicate Bank to combine

The merged entity will be 4th largest PSU bank in India

In a press briefing today, finance minister announced that Canara bank and Syndicate Bank will be merged. The entity will be fourth largest public sector bank with business of Rs 15.20 lakh crore.

The entity will have third largest branch network in India with 10,342 branches.

The scale and synergy will benefit through large cost reduction potential due to network overlaps. Similar culture will enable smooth consolidation. Cost saving and income opportunities will arise for JVs and subsidiaries.

Both the banks share a common CBS (core banking software), iFlex, which will enable quick realisation of gains.

Shares of Canara Bank fell 0.07% to Rs 220.55. The stock hit a 52-week high of Rs 302 on 01 Apr 2019. The stock hit a 52-week low of Rs 205.15 on 23 Oct 2018. Canara Bank has underperformed the market in past one year, falling 21.89% as against Sensex's 4.27% fall.

On a consolidated basis, Canara Bank's net profit rose 12.43% to Rs 383.04 crore on an 8.11% increase in the total income to Rs 15,231.72 crore in Q1 June 2019 over Q1 June 2018.

Shares of Syndicate Bank rose 6.94% to Rs 32.35. The stock hit a 52-week high of Rs 46.6 on 02 Apr 2019. The stock hit a 52-week low of Rs 29.1 on 23 Aug 2019. Syndicate Bank has underperformed the market in past one year, falling 22.83% as against Sensex's 4.27% fall.

On a consolidated basis, Syndicate Bank reported a net loss of Rs 957.37 crore in Q1 June 2019 over a net loss of Rs 1,238.33 crore Q1 June 2018. Total income rose 7.86% to Rs 6,080.69 crore in Q1 June 2019 over Q1 June 2018.

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