CHENNAI: The merger of Dena Bank, Vijaya Bank and Bank of Baroda will be completed in three financial quarters, Karnam Sekar, Chief Officer of Dena Bank, told reporters on Saturday.
The Central government had proposed the merger of the three banks, aiming to create the country’s third-largest lender. This move has been seen as a preparation for consolidation of public sector banks.
Late in September, the banks accepted the proposal. “The banks may not see massive profits immediately in the financial year 2018-19, but however, in the few years after that, we’re expecting large chunky Non Performing Assets (NPA) to return,” said Sekar explaining that the mid-term expected outcome of the merger seems promising.
He said the NPAs of banks have not gone up in the recent past and that accretion of NPA is over for Dena Bank. He, however, acknowledged that the amalgamation is not going to be a simple process.
“Harmonising of four broad areas have to be planned soon: transaction front and customer experience, creating a common credit plane spread across corporates and infrastructure and branches of the different banks,” he said. The bank has formed an internal committee to plan for the merger. The heads of the three banks are likely to meet next week. The combined entity will have a strong presence across the nation with over 34 per cent of low-cost deposits.
“However, the HR practices of the banks are similar and the employee hierarchy is not very different as they are all in the public sector. The merger is perfect. This is an arranged-love marriage,” he said.