Search the Internet          Tips  Sites: Finance, Investment

UTI Bank, Global Trust Bank in 9:4 swap ratio

The boards of directors of private sector banks UTI Bank and Global Trust Bank approved on Saturday a share-swap ratio of nine shares for four shares in the merger of the two banks.

"The boards agree to recommend to shareholders a swap ratio of nine shares of UTI Bank to four shares of Global Trust Bank," a joint statement by the banks said. The boards also announced a general meeting of the respective banks on February 24.

"It is proposed the merged bank be named UTI Global Bank and will have a combined balance sheet size of Rs 200 billion, making it the largest private sector bank," the statement said. UTI Bank announced on Wednesday it would merge with Global Trust Bank. The latest merger signals increasing consolidation in a quest for market share and size and comes on the heels of a merger last month between two other private banks, ICICI Bank and Bank of Madura.

UTI Bank and Global Trust, co-founded by veteran banking professional Ramesh Gelli, were set up after 1994 when the Reserve Bank of India started issuing licences to new private banks under an economic reform programme. Twenty-seven state-run banks control about three-quarters of the country's banking business.

Shares of UTI Bank ended 7.9 per cent higher at Rs 53.80, while Global Trust Bank shares closed 4.7 per cent up at Rs 98.40 on the Bombay Stock Exchange on Thursday. The benchmark Sensex closed 0.09 per cent higher at 4,330.22. Financial markets in India were closed on Friday for a national holiday marking Republic Day.

Tell us what you think of this report