Mergers may not be a bad idea for BoB, Canara Bank

Stocks dip but experts see need to consolidate public sector banks

Around the same time last year, when talk of consolidating public sector banks (PSBs) gathered momentum, it had a positive rub-off effect on their stock prices, leading to a re-rating in their valuations.

Talks of mergers have resurfaced with reports suggesting a possible merger between Bank of Baroda (BoB), Dena Bank and Bank of Maharashtra, all of which draw a significant part of their business from western India. Likewise, among the south-based banks, there is talk of Vijaya Bank and Syndicate Bank being merged with Canara Bank. 

With the merger process gathering steam, region-wise consolidation being key, investors should gear