8/6/2019 Rbi and Natwest
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Merger of royal bank of Scotland and Natwest bank
The merger of The Royal Bank of Scotland (RBS) and National
Westminster Bank (Nat West)
as well as other major British banks including Barclays and
Woolwich Building Society has created
major economical and social interest boasting scholarly debate
.It is important to understand why
such mergers take place and the potential gains of doing so.
The RBS and Nat West merger was formed in delivering Nat West
from inefficiencies of poor services
originally formulated from the merger bid proposed by the Bank
of Scotland. Nat West will benefit from the
forward thinking impact present at the RBS Group. The
entrepreneurial spirit will help the bank as well as the
whole merger to move forwards in a highly competitive market
simultaneously maximising customer
satisfaction - a major key to survival in this industry. Impact
on shareholders during the merger or discussion
process can vary bringing about instability and lack of
confidence.
Following the completion of the RBS 20.8 billion bid; share
yields rose in price to an attractive level in
line with the UK economy thereby portraying the strength of the
merger. In essence the driving force behind
the success of the RBS bid over the Royal Bank of Scotland was
in fact the higher share price expectations
offering the perfect icing.
There are many foreseeable benefits of merging to create a
larger customer base, maintaining
market power and ultimately reducing risk). However, in the
reshuffling process redundancies and
unemployment are highly evident. A BBC News article revealed
that the RBS hopes to achieve efficient
operation by cutting costs by 1 billion thereby threatening
18,000 Nat West Employees (Friday, 11 February,
2000). Nevertheless, employee downsizing moves with the
financial services market where the shift from
branch based services to E-commerce in terms of internet and
telephone banking services. Henceforth, new
areas of employment are created accommodating an advancing
system thereby giving scope to major
economies of scale. Thus the merger boasts upon innovation and
development where further employees will
be trained to the highest standards to deliver customer services
and knowledge of products achieving greater
efficiency.
Today the RBS and Nat West group are growing from strength to
strength with worldwide
status and second largest market capitalisation within Europe.
The rise of this super bank portrays
8/6/2019 Rbi and Natwest
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Merger of Bank of Rajasthan and ICICI Bank
All 463 branches of Bank of Rajasthan will function as ICICI
Bank branches from tomorrow with the Reserve
Bank of India (RBI) giving its approval to their merger.
"All branches of Bank of Rajasthan will function as branches of
ICICI Bank with effect from August 13, 2010,"
the RBI said in a statement while approving the merger
scheme.
The integration of BoR would help ICICI Bank to increase its
branch network by 25% to about 2,500 across the
country. It will also give greater visibility to the bank in the
western and northern parts of the country
ICICI Bank has about 2,000 branches while BoR has 463 spread
across the country.
"I am happy [with the RBI decision]. The synergies will start
from tomorrow and integration will be completed
this month," said Pravin Tayal, the promoter of the Bank of
Rajasthan prior to the merger.
ICICI Bank CEO and managing director Chanda Kochhar could not be
contacted for comments.
With the merger, the turnover of ICICI Bank would cross
Rs4,00,000 crore. BoR has a total business of over
Rs23,000 crore, against nearly Rs3,84,000 crore of ICICI
Bank.
This is the third acquisition by ICICI Bank. It had earlier
acquired Bank of Madura way back in 2001 and the
Maharashtra-based Sangli Bank in 2007.
The shares of ICICI Bank closed at Rs963.95, down 0.74%, while
those of Bank of Rajasthan slipped 0.03% to
Rs190.15 on the Bombay Stock Exchange.
In May, the boards of both banks approved a share-swap deal that
valued the Udaipur-based BoR at over
Rs3,000 crore.
The share-swap ratio was fixed at one ICICI Bank share for every
4.72 shares of BoR.
Following approval by their shareholders, the banks moved the
RBI on June 25 for regulatory clearance.
The Calcutta high court last month quashed a civil court
injunction against the deal and asked the petitioner to
pay a cost of Rs50,000 for filing a frivolous case.
A civil court here on June 21 had restrained BoR from holding a
shareholders' meeting the same day, where an
approval was being sought for merger with ICICI Bank.
Although the BoR management called off the extraordinary general
meeting, the shareholders went ahead
and voted in favour of the merger and the issue is now pending
the approval of the Reserve Bank of India.
The same day, ICICI Bank appealed to the Calcutta high court,
which in turn stayed the civil court injunction
and posted the matter for hearing later.
Earlier on June 21, when BoR's shareholder meeting was underway
in Mumbai, the bank's managing director
received a letter from an advocate in Kolkata, informing him
about the civil court injunction.
