Indian Bank is set to become India's 10th-largest lender by assets after merging with Allahabad Bank as part of the Indian government's push to consolidate 10 state-owned lenders into four bigger institutions.

The merged entity will have total assets of about 5.300 trillion rupees and total net loans of about 3.235 trillion rupees.

The merged entity will also become the seventh-largest state-owned bank in India, with a combined network of 5,811 branches as of Oct. 9, according to data compiled by S&P Global Market Intelligence.

S&P Global Ratings revised its outlook on Indian Bank to negative from stable after the merger plan was announced. The rating agency said it believes the bank's planned merger with the weaker Allahabad Bank will potentially undermine its asset quality and capitalization given the latter's high nonperforming loans and lower common equity Tier 1 ratio.

As of Oct. 15, US$1 was equivalent to 71.49 Indian rupees.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global.