Shares of associate banks of state-run lender State Bank of India (SBI) rose in the range of 4 to 13 percent on Tuesday in response to news that the respective boards of the banks have proposed a merger with SBI at a meeting held on Tuesday. However, a section of the employees at these banks is opposed to the merger and has given a strike call.
The five banks are State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Bikaner and Jaipur (SBBJ), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH).
SBM shares gained the most and closed at Rs. 426.70 apiece, up 12.76 percent. SBT ended 9.87 percent higher at Rs. 399.10, while the SBBJ stock moved 4.22 percent to end at Rs. 508.95.
The three listed entities also informed the stock exchanges on Tuesday about their "in-principle" decision to merge the respective banks with SBI.
SBP and SBH are not listed.
Employees at the associate banks
The combined headcount of SBBJ, SBT and SBM was 39,150 employees as on March 31, 2016, based on regulatory filings by the three banks with the stock exchanges.
SBM had 10,650 employees consisting of 3,742 supervisory staff and 6,908 non-supervisory staff as on March 31, 2016, while SBT had 14,892 employees at the end of financial year 2015-16. SBBJ had a headcount of 13,608, including 5,416 officers as of Dec. 31, 2015.
The details for SBP and SBH were not available.
All employees of associate banks will go on strike on May 20, PTI quoted C H Venkatachalam, general secretary of All India Bank Employees Association (AIBEA) as saying.
Income, profit and bad loans
SBT net profit was Rs. 338 crore on net interest income of Rs. 2,554 crore in 2015-16. Net NPAs stood at 2.77 percent.
SBM earned net profit of Rs. 357.85 crore on total income of Rs. 7,937.85 crore for the financial year 2015-16. Net non-performing assets (NPAs) as a percentage of total advances almost doubled to 4.18 percent from 2.16 percent in 2014-15.
SBBJ earned net profit of Rs. 850 crore on net interest income of Rs. 3,304 crore in 2015-16. Net NPAs rose to 2.75 percent from 2.54 percent in 2014-15.
SBP data shows that the bank has been posting a decline in net profit over the years, from Rs. 794 crore in 2011-12 to Rs. 447 crore in 2013-14 and Rs. 362 crore in 2014-15. During the period, the bank's net NPAs more than doubled to 3.88 percent in 2014-15 from 1.35 percent in 2011-12.
In 2015-16, the bank reported net loss of Rs. 972 crore.
SBH reported net profit of Rs. 1,065 crore on total income of Rs. 15,632 crore in 2015-16 and net NPAs of 3.37 percent.
The S&P BSE Sensex closed 120 points higher at 25,774.