SBI shares close at 25-month high on merger with five associate banks
The SBI shares closed at ₹296.70, a level last seen on 3 March 2015, up 1.21% from the previous close
Mumbai: Shares of State Bank Of India, India’s largest lender, closed at a 25-month high on Wednesday, gaining for the ninth straight trading session.
The stock closed at ₹ 296.70, a level last seen on 3 March 2015, up 1.21% from its previous close. In the last nine sessions, it has gained 10.9% and so far this year, it is up 18.8%. India’s benchmark Sensex index rose 0.21% to close at 29974.24 points on Wednesday.
On 1 April, State Bank of India (SBI) merged its five associate banks—State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT)—and Bharatiya Mahila Bank (BMB) -- with itself.
“The idea (behind the merger) is to increase efficiency, increase productivity, better the ratios that we have in various areas. Growth will come not necessarily in the top line", SBI chairman Arundhati Bhattacharya told Mint in an interview dated 3 April.
Also Read: SBI completes asset quality review of associate banks post merger
With the merger, SBI has joined the league of top 50 banks globally in terms of assets. The bank said that it will sell some non-core assets of the merged entity and that it does not expect any nasty surprises on non-performing assets in near future.
Post-merger, the bank will have 370 million customers, around 24000 branches and nearly 59,000 ATMs. Its consolidated business will go up to ₹ 44 trillion, with deposits above ₹ 26 trillion and advances at ₹ 18.50 trillion.
Of the analysts covering the stock, 38 have a “buy" rating, seven have a “hold" rating, while six have a “sell" rating, shows Bloomberg data.
“SBI continues to be our preferred idea among public banks. The bank continues to work through its bad loan problem and the focus is shifting to resolutions/provisions over recognition. Greater focus on profitability and productivity should lead to a stronger institution in the next cycle", said Kotak Institutional Equities in 8 March report.
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