Banks assure staff as govt maps out details
MUMBAI:Even as the government works on the contours of a mega bank merger, Vijaya Bank managing director and chief executive officer (MD and CEO) Sankara Narayanan assured his staff that the government has decided that all three banks—Bank of Baroda, Dena Bank and Vijaya Bank—will retain their individual identities post merger.
In a letter to employees, Narayanan said the government has decided to amalgamate the bank with other two banks, suggesting that this merger could happen in one go. “Recognising the innate strength of our bank, the governmenthasproposedanamalgamation with Bank of Baroda and Dena Bank, where each of the three banks would retain its identity and use the benefit of collective strengths to be a global bank with better performances,” Narayanan wrote. Mint has seen a copy of the letter.
However, while the bank managements attempt to reassure employees, uncertainty looms over the merger process and its completion window. Narayanan’s letter has added to the speculation.
On Tuesday, Narayanan also addressed the employees at the corporate office and other regional offices via webcast. According to one of the employees present during the address, Narayanan said all three banks will continue with separate balance sheets and a combined balance sheet at the merged entity level. “He assured that he will try to protect the logo of the bank even as the new entity will take a new name,” said a bank employee who did not wish to be identified. “The managing director also said that he expects to close down 500 branches,” he said.
Analysts at Kotak Institutional Equities, led by MB Mahesh, said on Tuesday in a report that the merged entity will have more branches in Western India than anywhere else. While there will be 2,205 branches in the west, the south and north will have 846 and 713 branches, respectively.