Dena Bank expects the valuation report for the merger in the next few weeks

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Dena Bank has begun an independent valuation regarding its proposed merger with two other state-based banks, the report of which is expected to be out in the next four to five weeks, according to a report by Moneycontrol.

Dena-Bank
Dena Bank expects the valuation report for the merger in the next few weeks

The government has proposed a merger between Dena Bank, Vijaya Bank, and Bank of Baroda, post which the new entity is expected to become the second largest bank after State Bank of India in terms of number of branches.

Dena Bank is also working towards its target of bringing down its non-performing assets (NPAs) by Rs.6,000 crore by March 2019, so as to strengthen its books before the merger takes place. Dena has undertaken project ‘Mission Dena 9999’ which aims to bring down its NPAs from the current Rs.16,000 crore to Rs.10,000 crore by March 2019.

Dena Bank in order to reduce its NPAs and ensure that the merger is successful is looking at various options such as One-time settlements, National Company Law Tribunal (NCLT), selling of bad assets to Asset Reconstruction Companies (ARCs). One of the options that the bank will also look at is a capital infusion from the government.

Currently, Dena Bank, Vijaya Bank, and Bank of Baroda have set December 15, 2018, as the deadline to agree on a primary share swap for the three combined bodies.

Apart from Dena Bank, the other two lenders will carry out their own independent valuations, post which the share swap ratio will be subject to the approvals from the Parliament, Reserve Bank of India, and their respective boards.

Sources: Moneycontrol, Livemint, The Hindu Business Line

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