Lok Sabha nod to merger of banks with SBI

SBI’s gross NPAs surged 85.21% to Rs1.88 trillion at the end of the June quarter from Rs1.01 trillion in the same quarter last year

SBI’s gross NPAs surged 85.21% to Rs1.88 trillion at the end of the June quarter from Rs1.01 trillion in the same quarter last year

Five subsidiary State 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 the Bharatiya Mahila Bank merged with SBI from 1 April.

The bank witnessed a larger slippage into bad loans from standard assets from the retail - small and medium enterprises (35 percent), agriculture (40 percent) and housing (14 percent) portfolio.

This increased the total customer base of SBI to 37 crore, a deposit base of Rs 26 lakh crore, a branch network of around 24,000 and almost 59,000 ATMs.

The bank claims its overall financials continued to deteriorate as it grappled with the integration of its subsidiaries in the country's biggest-ever banking sector merger.

SBI, which on Friday reported its first quarterly results after the merger, said net profit was 20.06 billion rupees ($312.84 million) in the three months through June, from 3.74 billion rupees a year earlier.

"You can not compare merged entity with the solo because there is an alignment of books that is going on", Bhattacharya told reporters.

The bank completed the data merger process, merger of administrative offices, reallocated branches to different regions, migrated accounts to the new process, re-mapping and shifting of accounts to different controllers, movement of the staff and rationalisation during the April to June quarter. Of the total slippages, Rs 8,363 crore came from the corporate book and the remaining Rs 17,886 crore came in from the retail book. The merger has been planned keeping in mind the benefit of people and going forward its benefits will be seen, he said. That is the reason slippages this quarter rose.

The bank further expects a slippage of Rs 30,000 crore but "we expect to pull back a sufficient amount and net increase in this area would be around Rs 7,500 crore and in the corporate book our guidance is around Rs 24,000 crore", Bhattacharya added. The merged entity began operation with a deposit base of more than Rs 26 lakh crore and advances level of Rs 18.50 lakh crore.