September 18, 2018 / 4:06 AM / in 7 months

BUZZ-India's Bank of Baroda sinks after merger announcement; Dena, Vijaya rise

** Shares of state-run Bank of Baroda fall as much as 14.2 pct to 116.1 rupees in biggest daily pct fall since Jan 2015

** Smaller rival Dena Bank hits upper circuit, rises as much as 19.8 pct to 19.05 rupees; stock posts biggest daily pct gain since Jan 2008

** Vijaya Bank rises as much as 10 pct to 66 rupees, highest since Jan

** India to merge the three state-run banks amid efforts to tackle a pile of bad loans plaguing the banking sector and revive credit growth, the financial services secretary said on Monday

** Jefferies analysts “don’t think the merged entity comes off terribly worse off, at least on paper, though a smooth three-way merger is always a tall ask”

** Deutsche Bank cuts TP to 145 rupees from 180 rupees, rating to “hold” from “buy” as the brokerage expects premium for co over other state-run banks to likely reduce and near term risks to increase

** DB analysts expect merger exercise to take 6-12 months to complete

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