The government last week announced the merger of 10 state-owned banks into four. One of them is the merger between Syndicate Bank and Canara Bank.
To discuss the merger in detail, CNBC-TV18 spoke with RA Sankara Narayanan, MD & CEO of Canara Bank and Mrutyunjay Mahapatra, MD & CEO of Syndicate Bank.
"As far as the amalgamation is concerned, it is from the same culture, same area and same region but don’t see any immediate closing of any ATMs or branches but we are confident that synergy will be used for higher growth and being the number four bank in a combined entity,” Narayanan said on Tuesday.
"The synergies would be used for better reach of customers", said Narayanan, adding that they had a combined business of Rs 15.2 lakh crore along with 10,300 branches, which would be used for adding up more customers.
"With 27 banks now becoming 12 banks now there would be greater potential to improve on regional business as well as a national business. Another advantage is that Canara Bank is widespread across India and not only in South India, similarly, Syndicate also has an equal presence", said Narayanan.
Mahapatra is of the view that the merger between Syndicate and Canara was one of the best of the four mergers that were announced by the government. “Today’s newspapers have termed that the Syndicate and Canara Bank merger will be most value accretive for shareholders because of the synergies,” he said.
Talking about the synergies, Mahapatra said, "Syndicate has larger number of branches in UP and Andhra Pradesh, while in Delhi both of the banks together would now have 400 branches. There will not be a single territory left out of the merged entity which will have tremendous power in addition to cost reduction potential."