Behemoth in making: SBI board okays merger of associates, BMB

Moving a step closer to creation of a global-sized bank with assets worth over Rs 37 lakh crore, the SBI board today approved merger of its five associate banks and Bharatiya Mahila Bank with itself.
It also finalised the share swap ratio for three of the listed subsidiaries and BMB.
"The central board of directors today approved the merger of State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT) and BMB," the country's largest lender said in a regulatory filing.
As per the merger proposal, SBBJ shareholders will get 28 shares of SBI (Rs 1 each) for every 10 shares (Rs 10 each). Similarly, SBM and SBT shareholders will get 22 shares each of SBI for every 10 shares they hold.

In the case of Bharatiya Mahila Bank, 4,42,31,510 shares of SBI will be swapped for every 100 crore of BMB shares having a face value of Rs 10.
The two unlisted subsidiaries are fully owned by SBI.

The merger will create a banking behemoth of global scale with a balancesheet of Rs 37 trillion or over USD 555 billion, making it one of the top 50 global financial powerhouses. The merged entity will have 22,500 branches and 58,000 ATMs serving a customer base of over 50 crore.
SBI has close to 16,500 branches, including 191 foreign offices across 36 countries while the five subsidiaries have nearly 6,000 branches.

"The share swap ratio is favourable to minority shareholders. We are confident that the ratio would be largely acceptable to all shareholders," SBI Deputy Managing Director in charge of associates and subsidiaries Neeraj Vyas told PTI.
The board also approved merger of two unlisted associate banks -- State Bank of Patiala and State Bank of Hyderabad -- with the parent, Vyas said.
Abizer Diwanji, Partner and National Leader for financial services at EY, which advised the share swap deal for SBI, said, "The ratio will be acceptable to all shareholders."
According to brokerage Religare Securities, barring SBM shareholders, the share allotment ratio is broadly even for all the holders.