ComBank-NDB merger -a formidable force

The stock market is welcoming the proposed merger of NDB and Commercial Bank, saying that it will be a stronger force in the industry, albeit being cautious of the two entities’ systems that need to be in place.

“It will be the biggest local bank apart from the three state banks, if a ‘merger’ per say happens,” a stock market analyst said. He said the biggest challenge for the two will be to figure out how NDB and Commercial Bank shares will be valued. He added that the merged entity’s stronger balance sheet will leverage notably bigger projects and expansion overseas.

He said the Central Bank, which is pushing the industry to consolidate has been advocating smaller banks to merge, but the merger between NDB and Commercial Bank will virtually ‘shake’ the industry.

The Staff Officers Association at the Commercial Bank is opposing the merger on the grounds that the work culture and other issues at NDB Bank is much different to the decentralized style prevailing at Commercial Bank and would affect an efficient operation that far outweighs the advantages of a merger.