Canara Bank, the country’s third largest bank, has set its sights on mid-sized Dena Bank and has appointed Ernst & Young to explore the possibility of the deal. This sets into motion the government’s move to introduce consolidation among public sector banks.
Sources close to the development said the chairmen of both banks would meet shortly, after which the matter would be taken up by the respective boards and employees would be consulted.
Bangalore-based Canara Bank, which has a network of 2,542 branches, is strong in the south while Mumbai-based Dena Bank, with its 1,050 branches, has a large presence in Maharashtra, Gujarat and Chhattisgarh. It overtook Punjab National Bank in 2005-06 to become the country’s second-largest public sector bank in terms of advances and deposits.
The merger will help Dena Bank, which has just come out of a huge burden of sticky loans or non-performing assets (NPAs). Though it is now better off financially, it has a limited capital base to grow business at the rates that the banking sector has seen in the last three years.
Read more in The Business Standard article.
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