The merged entity will be 4th largest PSU bank in India
In a press briefing after market hours on Friday, 30 August 2019, Finance Minister Nirmala Sitharaman announced that Canara bank and Syndicate Bank will be merged. The entity will be fourth largest public sector bank with business of Rs 15.20 lakh crore.
The entity will have third largest branch network in India with 10,342 branches.
The scale and synergy will benefit through large cost reduction potential due to network overlaps. Similar culture will enable smooth consolidation. Cost saving and income opportunities will arise for JVs and subsidiaries.
Both the banks share a common CBS (core banking software), iFlex, which will enable quick realization of gains.
The finance minister announced upfront capital infusions of Rs 55250 crore into 10 public sector banks. As per the proposal, Canara Bank is being allocated Rs 6500 crore.
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Shares of Canara Bank slumped 6.03% to Rs 207.25 at 10:45 IST on the BSE. The stock hit a high of Rs 213.35 so far during the day. The scrip has hit a low of Rs 205 in intraday, which is also a 52-week low for the stock. The stock hit a 52-week high of Rs 302 on 01 Apr 2019.
On the BSE, 4.51 lakh shares were traded in the counter so far compared with average daily volumes of 39 lakh shares in the past one quarter. Canara Bank has underperformed the market in past one year, falling 21.89% as against Sensex's 4.27% fall.
On a consolidated basis, Canara Bank's net profit rose 12.43% to Rs 383.04 crore on an 8.11% increase in the total income to Rs 15,231.72 crore in Q1 June 2019 over Q1 June 2018.
Shares of Syndicate Bank added 1.08% to Rs 32.70 at 10:45 IST on the BSE. The stock hit a high of Rs 33.5 and a low of Rs 32.3 so far during the day. The stock hit a 52-week high of Rs 46.6 on 02 Apr 2019. The stock hit a 52-week low of Rs 29.1 on 23 Aug 2019.
On the BSE, 2.03 lakh shares were traded in the counter so far compared with average daily volumes of 23 lakh shares in the past one quarter. Syndicate Bank has underperformed the market in past one year, falling 22.83% as against Sensex's 4.27% fall.
On a consolidated basis, Syndicate Bank reported a net loss of Rs 957.37 crore in Q1 June 2019 over a net loss of Rs 1,238.33 crore Q1 June 2018. Total income rose 7.86% to Rs 6,080.69 crore in Q1 June 2019 over Q1 June 2018.
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