Bank Mergers: Union Bank Of India To Take Over Andhra Bank And Corporation Bank
The merged Union Bank Of India, Andhra Bank, Corporation Bank entity will become India’s 5th largest PSU bank by size.
Union Bank of India will take over Andhra Bank and Corporation Bank as part of the Narendra Modi government’s plan to merge 10 public sector banks into four.
The total number of state-owned banks will come down to 12 from 21 once the process is completed.
The Acquirer
Union Bank of India will see itself take over Andhra Bank and Corporation Bank. The combined advances base of the merged bank will be Rs 6.39 lakh crore. The deposit base will stand at Rs 8.2 lakh crore. It will be the fifth largest public sector bank in the country.
Union Bank has a high gross non-performing asset ratio of 15.18 percent. Its capital adequacy ratio at the end of the first quarter stood at 11.43 percent. The government will infuse Rs 11,700 crore worth capital in the lender.
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The Banks Being Acquired
Andhra Bank
Andhra Bank is mostly focused on the southern region. Its bad loan ratio stood at 16.44 percent at the end of June. The lender is being merged into Union Bank of India.
Corporation Bank
Corporation Bank, headquartered in Mangalore, is being merged with Union Bank of India. It had a bad loan ratio of 15.44 percent as of June.