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United Bank: United Bank expects to gain Rs 250 crore from merger

The Indian State-owned Union is merging with Andhra and Corporate , hoping to more than Rs 25 in cost benefits through rationalization of branch offices and technical savings from merging entities. The of the three banks will take effect on April 1, as part of the government's large-scale of 10 public sector banks to create four global-scale lenders, a move that will begin in the next fiscal year.

Bank said that the implementation of all processes during the merger will not cause too much disruption to customers and employees of Andhra Bank and Corporate Bank. "The revenue will be generated due to the rationalization of branches and cost reductions in technology. We expect to generate synergies of more than Rs 25 crore over the next three years," said Raj Kieran, Managing Director and CEO of Union Bank of India. Rai G told in a telephone interview.

The combined entity will have 9,500 branches and 12,000 ATMs across the country.

"Of the 9,500 branches, we have identified more than 700 branches, which will be rationalized due to proximity, but not immediately," Rai said. "Maybe about 300 branches will be in the first year. Rationalize. "

The capital adequacy ratio of the combined entity will be 12.5-13%, and the total net asset value and net asset value will be 14% and 6%, respectively.

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The merger will create 75,000 employees, of which 37,000 will be from Andhra Bank and Corporate Bank. Rai said technology integration could take a year.

"By September, Corporate Bank and Andhra Bank will merge in December. After that, it will take three months to register for online banking and mobile banking." But the bank is working to resolve these issues.

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He said human resources coordination has been completed and the board has approved all products, processes and policies of the merged entity.

"I'm comforted that interference with customers and employees will be minimized or zero," he said.

Interoperability of basic banking services is in place, such as fund transfers, cash deposits for customers of Andhra Bank and corporate banks.

Rai further stated that there are plans to launch new loan products for customers of the merged entity, but the plan has been postponed to avoid the hassle of customers and employees who have been challenged due to the 21-day during the corona virus . "Due to the development of the situation in the past month, some things, especially in terms of prepayment, have been postponed. Therefore, we told them (Andhra Bank and Corporate Bank) that they can continue to use the old products." He said . However, MSME and retail borrowers from Andhra Bank and corporate banks will be able to use loans under the emergency credit facility established by Union Bank to provide more liquidity to customers by COVID-19.

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He also said that the benefits of the Reserve Bank of India's reduction in repo rates will be transferred to all customers of the merged entity.

In terms of deposits, customers of the three banks will get the same products from the start.

He said that some parts of the combined entity may be relocated to take advantage of the headquarters of Andhra Bank and Corporate Bank in Hyderabad and Mangalore, respectively.

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"We are seriously considering moving some departments (such as digital banking, auditing and inspection departments) and some departments from the operational side to the headquarters of the two banks," Lai said.

He added that a number of residential and commercial properties of Andhra Bank and Corporate Bank have been identified and that they will be gradually disposed of.

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