State Bank of India seems to be biting off more than it can chew by merging five associate banks with itself.
Ernakulam district in Kerala is a much sought-after destination for setting up branches by leading banks. Even IDFC Bank, the new kid on the block, was quick to set up an outpost. But the country's largest bank, State Bank of India (SBI), is facing a problem of plenty there.
SBI’S proposed merger with Kerala-headquartered State Bank of Travancore is doubling the bank’s branches in the district to close to 200 overnight.
The merger with five associate banks (plus Bhartiya Mahila bank) will bring similar challenges for SBI in major districts in the country. More so, in states where the associate banks are headquartered – Rajasthan, Karnataka, Andhra Pradesh, Punjab and Kerala.
In fact, the branch gridlock is just one of the many pain points. For instance, the stressed loans of the five associate banks (gross NPAS and restructured loans) add up to a staggering ₹35,396 crore. This amounts to almost half of SBI’S stressed loans portfolio of ₹66,117 crore in 2015/16. In contrast, the deposits, advances and assets of these banks is less than one-fifth of SBI.
Bu hikaye Business Today dergisinin Nov 06, 2016 sayısından alınmıştır.
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Bu hikaye Business Today dergisinin Nov 06, 2016 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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