State Bank of India SBI headquarters
State Bank of India (SBI) opened a branch in Naypyidaw (Yangon), Myanmar on Monday, marking its 54th foreign branch. SBI headquarters in Mumbai, India, March 14, 2016 (Representational image).Reuters file

The State Bank of India (SBI) is poised to reap a multi-billion-dollar windfall from the mega merger exercise that involves the five associate banks and Bharatiya Mahila Bank (BMB) merging with India's largest lender. Reuters quoted the Mumbai-based public sector bank as saying in a statement on Saturday that the lender will gain $120 billion in assets from the merger.

On Thursday, SBI had announced that its board approved merger of the five associate banks — State Bank of Travancore (SBT), State Bank of Mysore (SBM), State Bank of Bikaner and Jaipur (SBBJ), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH) — and the three-year-old women's bank, the Bharatiya Mahila Bank, with itself.

The combined entity will have over 24,000 branches with 2.70 lakh employees and 58,000 ATMs serving over 50 crore customers, reported PTI.

The staff strength of SBI is 2,04,975 employees, according to a presentation made by the bank after announcing the first quarter results.

In an interview to Bloomberg TV India (BTVi), SBI MD Rajnish Kumar said that some closure of bank branches will be inevitable, though there won't be large scale lay-offs.

"There might be some branch closures," he said, adding, "But we open many branches every year and we have a branch expansion plan. We have a three-year branch expansion plan and optimisation in terms of old and existing locations."

On recruitment and lay-offs, he said, "There will be savings on account of less people required. But the attrition will happen in a normal course because every year 13,000 people retire. And how much we need to replace will depend on the synergies from the merger."

SBI shares closed with a gain of 4.15 percent on Friday to end at Rs. 258.50.

The swap ratio finalized by the SBI board entails the following exchange of shares: 

28 equity shares of Re. 1 each of SBI for every 10 equity shares of Rs. 19 each of SBBJ;

22 equity shares of Re. 1 each of SBI for every 10 equity shares of Rs. 10 each of SBM;

22 equity shares of Re. 1 each of SBI for every 10 equity shares of Rs. 10 each of SBT and

4,42,31,510 equity shares of Re. 1 each of SBI for 100 crore equity shares of Rs. 10 each of Bharatiya Mahila Bank.

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