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SBI is now among Top Fifty Global Banks

SBI, the new acronym for the unified behemoth created by mega merger of associate banks – State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad – into the parent bank, State Bank of India, on April 1, 2017; puts SBI among the top 50 global banks and will lead to:

  • Help cut duplication
  • Rationalize branches
  • Streamline workforce
  • Mechanize
  • Upgrade technology
  • Cost savings on account of: Treasury operations, Audit & Technology
  • Lower cost-to-income ratio in the long term
  • Add to the bottom-line.

SBI management is optimistic about the merger and related synergies, as it will be absorbing its associate banks wherein, technology platform, work culture and asset recognition policies are largely the same, but with the biggest risk of integration of more than 70,000 employees.

State Bank of India was even earlier the largest bank in the World as far as manpower and number of branches was concerned but scale the mega-merger brings with it:

  • An asset book of the merged entity a whopping Rs 32 lakh crore
  • Merged entity will be serving over 37 crore customers
  • Gross NPAs of SBI Standalone at Rs. 1.12 lakh crore increase to 1.79 lakh crore of SBI Merged
  • Gross NPAs Ratio of SBI Standalone at 6.90% rise to 9.04% of SBI Merged
  • Net NPAs of SBI Standalone at Rs. 0.58 lakh crore increase to Rs. 0.98 lakh crore of SBI Merged
  • Net NPAs Ratio of SBI Standalone at 3.71% rise to 5.15%of the SBI Merged
  • Five merged associate banks collectively add:
    • 27% to SBI’s loans
    • 25% to SBI’s net worth
    • 35% to SBI branches
  • Quarter four 2017 Net Profit of Rs 2815 crore of SBI Standalone turns to Net Loss of Rs 3300 crore for the SBI Merged
  • Capital adequacy ratio of SBI Standalone at13.11%  reduced  to 12.35% for SBI Merged

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