Finance Secretary has recently told PSU banks to merge and consolidate. Already small State Banks have started merging with SBI. Next on the cards is State Bank of Indore. Others like State Bank of Travancore is going to follow. Here is how it compares with SBI and other leading PSUs.
| | Revenue in Cr. | EPS FY09 | EPS1Q-FY10 (annualized) | Growth | Current PE Ratio | Dividend Yield |
| SBI | 17472 | 143.67 | 146.48 | 1% | 14.55 | 1.3% |
| SB Travancore | 1073 | 121.57 | 143.68 | 18 % | 4.76 | 2.3% |
| Bank of Baroda | 4032 | 60.93 | 73.5 | 20% | 7.92 | 1.8% |
| Bank of India | 4377 | 57.18 | 44.44 | -ve | 7.21 | 1.2% |
SBT is available at almost 25% of SBI if you compare the current PE ratio. However considering SBI is very large bank compared to SBT. Some larger banks like BOB and BOI are trading at twice valuations compared to SBT. SBT also has paid better dividends its year on year they are increasing. Five years ago they paid Rs 5/- dividend while last year they paid Rs 13/-. The way EPS is growing you can expect Rs 15-16/- this years dividend.
Whenever the merger of SBT with SBI will be announced, the price will shoot up. State Bank of Bikaner and Jaipur is also similarly priced. Currently SBT is trading at 575 and SBBJ at 515
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