India's largest lender, State bank of India (SBI) has decided the share swap ratio for the merger of its associate State Bank of Indore with itself. According to the share swap ratio, for every 100 shares held in State bank of Indore, a shareholder will get 34 shares of State Bank of India.
In a meeting held on October 31, the central board of SBI approved the proposed scheme of merger of the State bank of Indore with the State Bank of India, and decided to allot 34 SBI equity shares in exchange of 100 shares of State Bank of Indore.
The scheme awaits final approval by boards of both SBI and State bank of Indore. It also awaits the apex banks and the government's consent.
State bank of Indore is the second associate to be merged with the parent bank. Last fiscal SBI had merged State Bank of Saurashtra with itself.
State bank of Indore registered an increase of 25.69 percent in its net profit on an year-on-year basis. The net profit at second quarter end stood at Rs. 78.62 crore. State bank of Indore has a network of over 500 branches.
OP Bhatt, Chairman, SBI said, "Merger of other subsidiaries may not happen soon. We have to get the government approval for those proposals." Other subsidiaries of bank are State bank of Hyderabad, State Bank of Patiala, State Bank of Travancore and State Bank of Mysore.
SBI posted a 10% hike in the net interest income. The profit mainly came from bonds and currency trading. Net profit increased to Rs 2490 crore in the second quarter. However, the bank's NPAs increased.