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Union Bank of India-led merger to create India's 5th biggest state-owned lender

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Union Bank of India-led merger to create India's 5th biggest state-owned lender

The Indian government-proposed merger among Union Bank of India, Andhra Bank and Corporation Bank will create the country's fifth-largest state-owned lender with assets of about 9.662 trillion rupees and net loans of 5.789 trillion rupees, according to data compiled by S&P Global Market Intelligence.

The proposed merger is part of the Indian government's plan to consolidate 10 state-owned lenders into four bigger banks. The move will reduce the number of state-owned banks in the country to 12 from 18.

The government has also announced plans to inject 117 billion rupees into Union Bank of India. Following the merger announcement on Aug. 30, S&P Global Ratings and Moody's affirmed their respective ratings on Union Bank of India, with a stable outlooks. After the merger, the bank's credit profile is expected to remain stable over the next 12 to 18 months, supported by moderately improving asset quality and profitability, Moody's noted.

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As of Oct. 16, US$1 was equivalent to 71.41 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.