SBI to take a view on merger of associates in mid-2012

NEW DELHI: Country's largest lender State Bank of India (SBI) on Saturday said it will take a view on consolidation of its remaining five associates in the next fiscal.

"We will take a view (on merger of associate banks) in mid-2012," SBI Chairman Pratip Chaudhuri said after a board meeting addressed by Finance Minister Pranab Mukherjee here.

SBI undertook first ever amalgamation of its associate State Bank of Saurashtra in 2008, followed by State Bank of Indore in August last year. "We did the last subsidiary merger of State Bank of Indore and now it is still taking us time because you have to rationalise branches," he said.

His comments come a day after bank employees across the country went on a day-long strike to protest proposed mergers of public sector banks, among other things.

"From an approval perspective and a regulatory perspective, we are happy that it has been put in place. So, next time we want to make the merger happen it is going to take us much lesser time," he said.

There are five associate banks of SBI. Two of them are fully owned, State Bank of Patiala and State Bank of Hyderabad, while remaining three, State Bank of Mysore, State Bank of Travancore and State Bank of Bikaner and Jaipur (SBBJ), are not 100 per cent owned.

These three entities are also listed at stock exchanges. Chaudhuri said, SBI's international expansion plans were discussed in the board meeting.

"Secretary Financial Services said that SBI should look for more aggressive expansion particularly in two geographies, including the CIS (Commonwealth of Independent States) countries with whom we have historic and very cordial relations from the days they were a part of the USSR and the neighbouring countries. We should think of expanding our footprint in the SAARC countries," he said.

Asked about loan growth, Chaudhuri said the bank is expecting a credit growth of 16-19 per cent during the current fiscal as against 21 per cent recorded in the previous fiscal.

Source: EconomicTimes