All for one

New Delhi, Aug. 27: The State Bank of India is all set to merge its three unlisted arms — the State Bank of Hyderabad, State Bank of Indore and the State Bank of Patiala — with itself.

“Following the merger of the SBI with its unlisted subsidiary, the State Bank of Saurashtra, the bank is looking to consolidate all its subsidiaries with itself to add 50 per cent more branches and boost lending,” said officials.

In the next stage, the three unlisted associates will be merged. This will be followed by consolidating the three listed subsidiaries — the State Bank of Travancore, State Bank of Mysore and the State Bank of Bikaner and Jaipur, said officials.

Analysts said after the merger of all subsidiaries with the parent bank, the SBI’s deposit base would expand by 46 per cent to Rs 634,919 crore and advances by 44 per cent to Rs 4,84,347 crore. The net worth of the bank will also jump 37 per cent to Rs 42,767 crore. After consolidation, the total balancesheet size of the bank will be Rs 815,174 crore.

“This will catapult the entity into having the largest business volume, thereby preventing a possible buyout by global rivals who are planning to come calling as soon as the sector is opened up in 2009,” said officials.

The SBI extends one in six loans in India and controls almost a quarter of domestic banking assets and ranks 69th globally.

Finance minister P. Chidambaram has been pushing for consolidation among PSU banks for quite some time. “Consolidation will improve PSU banks’ competitiveness against their private counterparts in servicing customers — both retail and corporate — in international and domestic markets,” said officials.