Punjab National Bank (PNB), Oriental Bank of Commerce, and United Bank of India will combine to form the nation’s second-largest lender. Canara Bank will take over Syndicate Bank; Union Bank of India is planned to be amalgamated with Andhra Bank and Corporation Bank; and Indian Bank will subsume Allahabad Bank.
Effective from April 1, 2020, the balance sheets as well as stocks of these banks will be integrated, according to the scheme of amalgamation approved by the Union Cabinet.
Shares of Syndicate Bank surged 15 per cent to Rs 21.85 in intra-day trade on the back of heavy volumes. At 10:29 am, the stock was up 9 per cent at Rs 20.65, against 0.33 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped nearly three-fold with a combined 2.68 million shares changing hands on the NSE and BSE so far.
Oriental Bank of Commerce was up 10 per cent to Rs 44.55, followed by Union Bank of India (up 6 per cent at Rs 38.50), Allahabad Bank (up 8 per cent at Rs 13) and United Bank of India (up 2 per cent at Rs 7.44). However, shares of Canara Bank hit a multi-year low of Rs 134, down 3.5 per cent on the BSE. Thus far in the calendar year 2020 (CY20), the stock has tanked 36 per cent from the level of Rs 208.
The banks will swing into action to take the process forward. The first step will be to approve the swap ratio for stocks, with anchor banks expected to hold board meetings in the coming days, Business Standard reported. READ MORE
Thus far in CY20, most of these banking stocks have plunged between 30 per cent and 40 per cent, against 7 per cent decline in the S&P BSE Sensex.