Delivering on growth a must for NextGen PSBs to attract investors

Analysts cite examples of SBI and BoB to indicate how the mergers could be value-depletive for investors in the near term

Most brokerages expect the merged entities of public sector banks (PSBs), dubbed NextGen PSBs by Finance Minister Nirmala Sitharaman, to post losses for another year. But this assumption is based on FY19 numbers, which went by as an extended year of asset quality clean up. Cut to FY20, the narrative, including that of recapitalisation, is being weaved around ensuring growth. Therefore, Punjab National Bank (PNB), Canara Bank, Union Bank and Indian Bank have their work cut out in the next three quarters. Not only they must ensure that the merger concludes smoothly, but they need to do so without taking