Mergers do not help

Recapitalisation is the only way out for public sector banks

State Bank of India (SBI) Chairperson Arundhati Bhattacharya warned of a “little more pain in the near term” while announcing the bank’s results on Friday. That was enough for the market to respond negatively with the stock slumping over 4 per cent on Monday. As the numbers showed, the “little pain” was a huge understatement — while the bank as a standalone entity reported a profit of Rs 2,800 crore for the fourth quarter and Rs 10,484 crore for the full year, the new consolidated SBI after the merger of four associate banks made a loss of Rs 390 crore