Product details

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Abstract

With the world economies growing in multiples, the sectors that make up these economies were showing consistent growth. One such traditional sector that had shown a consistent and constant growth across all economies was the banking sector. A number of positive developments had been observed in the Indian banking sector over the last few decades, more so in the last decade. Indian Banks had performed well not only on parameters such as growth and profitability but also on asset quality, service quality and value creation for all its stakeholders. India had been in the process of introspection post the global financial crisis to decide on the kind of financial structure India should have in future. Indian banks had experienced growth typically through the organic way but in today’s competitive scenario, with a limited scope of organic growth, banks had resorted to inorganic routes such as corporate restructuring or financial re-engineering. Another observation in this scenario was that though the merger and acquisition activity had been driven primarily by new private banks, Public Sector Undertakings (PSUs) had also increased the financial re-engineering activities. Earlier the motive for the same was to uplift the weaker banks but now there was a paradigm shift to bringing in and building more synergies. The following case looks into the proposed merger of the associated banks with State Bank of India (SBI) with the view of identifying the synergies and challenges involved in the merger.
Location:
Industry:
Other setting(s):
2010-2011

About

Abstract

With the world economies growing in multiples, the sectors that make up these economies were showing consistent growth. One such traditional sector that had shown a consistent and constant growth across all economies was the banking sector. A number of positive developments had been observed in the Indian banking sector over the last few decades, more so in the last decade. Indian Banks had performed well not only on parameters such as growth and profitability but also on asset quality, service quality and value creation for all its stakeholders. India had been in the process of introspection post the global financial crisis to decide on the kind of financial structure India should have in future. Indian banks had experienced growth typically through the organic way but in today’s competitive scenario, with a limited scope of organic growth, banks had resorted to inorganic routes such as corporate restructuring or financial re-engineering. Another observation in this scenario was that though the merger and acquisition activity had been driven primarily by new private banks, Public Sector Undertakings (PSUs) had also increased the financial re-engineering activities. Earlier the motive for the same was to uplift the weaker banks but now there was a paradigm shift to bringing in and building more synergies. The following case looks into the proposed merger of the associated banks with State Bank of India (SBI) with the view of identifying the synergies and challenges involved in the merger.

Settings

Location:
Industry:
Other setting(s):
2010-2011

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