Shares of State Bank of Mysore (SBM) have appreciated by almost 35 percent since May 17 when the associate bank of State Bank of India (SBI) informed the stock exchanges of the bank's approval to merge with SBI.
Based on the closing prices of Aug. 12 (Rs. 628.50) and May 17 (Rs. 467), the stock has gained Rs. 161.50, or 34.85 percent.
On May 17, SBM had informed the Bombay Stock Exchange (BSE) that its board had approved in-principle to merge with SBI.
"This is to inform the exchange that in-principal approval of the board of directors of the bank accorded to enter into negotiation with State Bank of India for acquisition of the business including assets and liabilities of State Bank of Mysore by State Bank of India," the Bengaluru-headquartered SBM said in a regulatory filing to the BSE.
SBM had 10,650 employees, consisting of 3,742 supervisory staff and 6,908 non-supervisory staff, as on March 31, 2016.
For the first quarter (Q1) ended June 30, 2016, SBM posted a huge loss of Rs. 472 crore in comparison to Rs. 94 crore net profit for the corresponding period last year, mainly on account of a sharp rise in provisioning for bad loans.
The bank had to provide Rs. 1,037.78 crore for bad loans in Q1, up from Rs. 131.89 crore in the year-ago period.
Gross non-performing assets (NPAs) and net NPAs as a percentage of total advances stood at 7.83 percent and 4.65 percent, respectively, as on June 30, 2016. In comparison, gross NPAs and net NPAs were lower at 4.21 percent and 2.10 percent, respectively, as on June 30, 2015.
SBI reported 31.7 percent fall in net profit in Q1 at Rs. 2,520.96 crore when compared with Rs. 3692.43 crore in the corresponding quarter last year on account of a sharp rise in provisioning for bad loans at Rs.7,413 crore in Q1 from Rs. 3,999.73 crore in the year-ago period.
Gross NPAs and net NPAs rose to 6.94 percent and 4.05 percent, respectively, as of June 30, 2016, from 4.29 percent and 2.24 percent, respectively, as of June 30, 2015.
Net interest income of SBI rose marginally to Rs.14,312 crore from Rs. 13,732 crore, YoY.