OBC, Syndicate Bank shares zoom after cabinet approves merger

Shares of select public sector banks rose up to 16 per cent 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 per cent, Syndicate Bank jumped 10.53 per cent, Allahabad Bank 9.23 per cent, Andhra Bank 3.91 per cent, United Bank of India 3.31 per cent and Corporation Bank 2.14 per cent on the BSE.

The Union Cabinet on Wednesday approved amalgamation of 10 public sector banks, including Allahabad Bank, Andhra Bank and Oriental Bank of Commerce (OBC), to create four large state-owned lenders with effect from April 1, Finance Minister Nirmala Sitharaman said.

The merger would result in creation of seven large PSBs with scale and national reach, with each amalgamated entity having business of over Rs 8 lakh crore.

As per the mega consolidation plan, OBC and United Bank of India will merge into Punjab National Bank; Syndicate Bank into Canara Bank; Andhra Bank and Corporation Bank into Union Bank of India; and Allahabad Bank into Indian Bank.