Banks announce share swap ratios

Move comes ahead of mergers

With the March-end deadline for the biggest-ever amalgamation scheme approaching, eight state-owned banks on Thursday announced swap ratios for the proposed mergers.

Punjab National Bank (PNB), in a regulatory filing, announced the share exchange ratio in accordance with the scheme of amalgamation, as it is set to merge Oriental Bank of Commerce (OBC) and United Bank of India (UBI) into itself with effect from April 1.

PNB’s board on Thursday had approved for amalgamation of OBC and UBI, Punjab National Bank said in a BSE filing.

According to the swap ratio, 1,150 equity shares of PNB are to be exchanged for every 1,000 equity shares of Oriental Bank of Commerce, while 121 equity shares of PNB are to be swapped for every 1,000 equity shares of UBI.

“The board of directors of the bank...have fixed Wednesday, March 25, 2020, as record date for issuing and allotting equity shares of the PNB to the shareholders of OBC and UBI as per the share exchange ratio,” PNB said in the filing.

Union Bank, in a separate exchange filing, said its board on Thursday had approved the equity share exchange ratio. It included 325 equity shares of Union Bank of India for every 1,000 shares in Andhra Bank and 330 shares in Union Bank for every 1,000 equity shares in Corporation Bank.

Also, for Syndicate Bank’s merger into Canara Bank, the share swap is 158 equity shares of Canara Bank for every 1,000 equity shares of Syndicate Bank.

Indian Bank said in a statement that for every 1,000 equity shares of Allahabad Bank, investors will get 115 equity shares of Indian Bank.

Post merger, PNB will become the country’s second largest bank, with business size of Rs. 17.94 lakh crore after SBI, which has business of over Rs. 52 lakh crore. Bank of Baroda will become the third largest bank, followed by Canara Bank, Union Bank of India, Bank of India, and Indian Bank.

Shares zoom

Meanwhile, shares of select PSBs rose on Thursday after the Union Cabinet approved amalgamation of 10 state-owned lenders with effect from April 1.

Oriental Bank of Commerce advanced 15.89%, Syndicate Bank jumped 10.53%, Allahabad Bank 9.23%, Andhra Bank 3.91%, United Bank of India 3.31% and Corporation Bank 2.14% on the BSE.

Recommended for you