17 March 2001

GTB-UTI Bank may be called off
Mumbai: In light of the continued controversy on the alleged share price manipulation by Global Trust Bank (GTB) and the subsequent revaluation of its merger proposal with UTI Bank, it is understood that the former is likely to walk out of the merger deal.

The new valuation report, to be prepared by Deloitte, Haskins & Sells, is likely to suggest a share swap ratio lower than 2.25 (nine shares of UTI Bank to four shares of Global Trust Bank) recommended earlier by the report prepared by SBI Capital Markets.

According to industry sources, GTB is unlikely to settle in for a swap ratio which would be at a variance with the original swap ratio.

Though senior officials of both the banks say that the merger is on, the appointment of Deloitte for a revaluation has not been taken well by GTB.

The earlier report prepared by SBI Caps, had taken into account the hidden non-performing assets of GTB as per the inspection report of Reserve Bank of India. Though the net NPAs of GTB in the inspection report was shown to be 1.8 per cent, industry sources say that net NPAs of GTB could be close to four per cent.