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UTI Bank and Global Trust to merge

In the third merger of its kind in the private sector, UTI Bank Ltd and Hyderabad-based Global Trust Bank have decided to merge, with Unit Trust of India to be the principal shareholder in the new entity.

This development follows the trend of consolidation in the private sector, which commenced with merging of Times Bank with HDFC Bank and the recent deal of Bank of Madura with ICICI Bank Ltd.

The new merged entity would be known as UTI Global Bank and a memorandum to this effect was signed in Bombay on Wednesday, UTI chairman P S Subrahmanyam said in Bombay on Wednesday night.

The boards of the two banks would meet on January 27 to consider the scheme of amalgamation and the swap ratio as per the valuation report of SBI Capital Markets Ltd and later seek approvals from shareholders, Reserve Bank of India and other relevant authorities.

P J Nayak, presently Chairman and Managing Director of UTI Bank is to take over the new entity while Ramesh Gelli, CMD of Global Trust Bank, would continue on the board of the UTI Global Bank.

The two banks have a network of 157 branches and 321 ATMs across the country and, at the end of December 2000, their combined net worth was Rs 9.28 billion, advances Rs 79.04 billion and deposits Rs 156.65 billion. The net profits of the two banks aggregated to Rs 1.61 billion.

UTI chief Subrahmanyam said both banks were discussing the merger for quite some time and that the new bank would combine the strengths and complimentary features of both the banks.

"It will be a strongly capitalised with a net worth likely to exceed Rs 10 billion by end of March 31, 2001 and would have a well diversified branch and ATM network," he said.

Referring to the merged bank's foray into insurance, Subrahmanyam said Ramesh Gelli would spearhead the new entity into the insurance sector.

Global Trust Bank Executive Director S Subasri has been retained as ED of the new bank, he added.

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