PNB, OBC, United Bank to merge

The merged entity will be 2nd largest PSU bank in India

In a press briefing today, finance minister announced that Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank of India will be merged. The combined entity will be second largest PSU bank in India with business of Rs 17.94 lakh crore. It will have second largest banking network in India with 11,437 branches.

The scale and synergy will benefit through high CASA and lending capacity combined in consolidated bank. The merger will result in large cost reduction potential due to network overlaps. Cost saving and income opportunities will arise for JVs and subsidiaries.

All three banks share a common CBS (core banking software), Finacle, which will enable quick realisation of gains.

Shares of PNB fell 0.23% to Rs 64.95. The stock hit a 52-week high of Rs 99.9 on 01 Apr 2019. The stock hit a 52-week low of Rs 58.65 on 01 Oct 2018. PNB underperformed the market in past one year, sliding 22.68% as against Sensex's 4.27% fall.

PNB reported net profit of Rs 1018.63 crore in Q1 June 2019 compared with net loss of Rs 940.01 crore in Q1 June 2018. Total income rose 0.59% to Rs 15161.74 crore in Q1 June 2018.

Shares of Oriental Bank of Commerce (OBC) rose 8.25% to Rs 73.5. The stock hit a 52-week high of Rs 119 on 01 Apr 2019. The stock hit a 52-week low of Rs 58.1 on 09 Oct 2018. OBC underperformed the market in past one year, down 16.17% as against Sensex's 4.27% fall.

OBC reported net profit of Rs 112.68 crore in Q1 June 2019 as against net loss of Rs 393.21 crore in Q1 June 2018. Total income rose 19.1% to Rs 5,634.98 crore in Q1 June 2019 over Q1 June 2018.

Shares of United Bank of India jumped 10.03% to Rs 10.42. The stock hit a 52-week high of Rs 13.25 on 01 Jan 2019. The stock hit a 52-week low of Rs 9.05 on 08 Oct 2018. United Bank of India underperformed the market in past one year, down 15.90% as against Sensex's 4.27% fall.

United Bank of India reported net profit of Rs 104.99 crore in Q1 June 2019 as against net loss of Rs 388.68 crore in Q1 June 2018. Total income rose 17.8% to Rs 3,003.13 crore in Q1 June 2019 over Q1 June 2018.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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