Pre-Merger

Total Income
Millions Allahabad Bank Change (%) Indian Bank Change (%)
2014 2,10,498 1,66,275
2015 2,18,736 3.91% 1,72,256 3.60%
2016 2,10,031 -3.98% 1,80,332 4.69%
2017 2,05,683 -2.07% 1,82,616 1.27%
2018 1,94,736 -5.32% 1,95,319 6.96%
2019 1,89,695 -2.59% 2,10,735 7.89%
CAGR (%) -2.06 4.85

Total Income: Allahabad Bank reported the highest value in terms of Total Income. But, the average
growth, Y-O-Y growth as well as CAGR of Indian Bank have been more in comparison to Allahabad
Bank as well as Positive.

Interest Income: comes from the loans and advances that banks give to businesses, organisations, and
people. The primary source of income for a bank is interest from these loans. Additionally, it comprises
income from investments, interest on accounts with the Reserve Bank of India, and other inter-bank funds.
Interest Income
Millions Allahabad Bank Change (%) Indian Bank Change (%)
2014 1,87,756 1,52,494
2015 1,97,491 5.18% 1,58,534 3.96%
2016 1,89,148 -4.22% 1,62,443 2.47%
2017 1,76,944 -6.45% 1,60,392 -1.26%
2018 1,63,984 -7.32% 1,71,153 6.71%
2019 1,69,158 3.15% 1,91,821 12.08%
CAGR (%) -2.06 4.70

Allahabad Bank reported the highest mean value in terms of Interest Income. But, the average growth,
Y-O-Y growth as well as CAGR of Indian Bank have been more in comparison to Allahabad Bank as
well as Positive

Interest Expenses: Banks accept deposits from both individual & corporate and pay interest to them.
These Deposits can be classified as Demand & Term Deposits. It also includes Interest on borrowings
from RBI & other inter-bank borrowings.

Interest Expenses
Millions Allahabad Bank Change (%) Indian Bank Change (%)
2014 1,34,346 1,08,875
2015 1,35,373 0.77% 1,13,898 4.61%
2016 1,29,851 -4.08% 1,17,954 3.56%
2017 1,23,729 -4.71% 1,08,915 -7.66%
2018 1,16,267 -6.03% 1,08,513 -0.37%
2019 1,13,543 -2.34% 1,21,668 12.12%
CAGR (%) -3.31 2.25
Net Interest Margin: It is the spread between Interest Income & Interest Expenses of a Bank.
Net Interest Margin
Millions Allahabad Bank Change (%) Indian Bank Change (%)
2014 53,410 43,620
2015 62,117 16.30% 44,636 2.33%
2016 59,297 -4.54% 44,489 -0.33%
2017 53,214 -10.26% 51,478 15.71%
2018 47,717 -10.33% 62,640 21.68%
2019 55,615 16.55% 70,153 11.99%
CAGR (%) 0.81 9.97
Allahabad Bank reported the highest value in terms of Net Interest Margin. But, the average growth, Y-O-
Y growth as well as CAGR of Indian Bank have been more in comparison to Allahabad Bank.

Operating Profit: It is the difference between Net Interest Margin & Operating Expenses (Payments to
employees, Rent, taxes & lighting, Printing & stationery, Depreciation, Auditors' fees, Legal Charges,
Repairs & maintenance, Insurance premium etc)

Operating Profit
Millions Allahabad Bank Change (%) Indian Bank Change (%)
2014 40,313 29,021
2015 44,793 11.11% 30,104 3.73%
2016 41,583 -7.17% 30,357 0.84%
2017 38,982 -6.26% 40,067 31.99%
2018 35,654 -8.54% 50,073 24.97%
2019 28,290 -20.65% 48,784 -2.57%
CAGR (%) -6.84 10.95

Net Profit: It is obtained after deducting Non Operating Expenses, Provision for Income Tax etc from Operating
Profit.

Net Profit
Millions Allahabad Bank Change (%) Indian Bank Change (%)
2014 11,808 11,596
2015 6,311 -46.55% 10,135 -12.60%
2016 -7,235 -214.64% 7,145 -29.50%
2017 -2,897 -59.97% 14,129 97.74%
2018 -45,881 1483.96% 12,629 -10.62%
2019 -82,943 80.78% 3,209 -74.59%
CAGR (%) -247.68 -22.66

CASA: It is the ratio of deposits in current & saving accounts to total deposits. A higher CASA ratio indicates a
lower cost of funds, as banks do not usually pay any interests on current account and the interest on saving
accounts is usually very low 3-4%.

Current Account & Savings Account Ratio (%)

Year Allahabad Bank Indian Bank
 2014 31.34 27.15
2015 33.55 28.77
2016 35.90 31.27
2017 45.37 37.08
2018 46.07 36.95
2019 49.48 34.71
CAGR (%) 9.56 5.04

Credit Deposit Ratio

Million Allahabad Bank Indian Bank
Year Advances Deposits CD ratio Advances Deposits CD ratio
2014 1,380,076 1,908,349 72.32 1,222,125 1,622,552 75.32
2015 1,498,771 1,933,760 77.51 1,258,702 1,692,042 74.39
2016 1,523,721 2,006,244 75.95 1,290,554 1,782,589 72.40
2017 1,507,527 2,018,353 74.69 1,277,077 1,824,800 69.98
2018 1,520,607 2,135,954 71.19 1,565,689 2,082,618 75.18
2019 1,422,122 2,143,301 66.35 1,812,619 2,420,408 74.89
CAGR 0.60 2.35 -1.71 8.20 8.33 -0.12
(%)

Return on Equity (%)

Year Allahabad Bank Indian Bank
2014 10.34 8.77
2015 5.26 7.21
2016 -5.24 4.69
2017 -2.01 8.57
2018 -46.62 7.19
2019 -115.87 1.98
CAGR (%) -262.15 -25.77

Return on Total Assets (%)

Year Allahabad Bank Indian Bank
2014 0.54 0.63
2015 0.29 0.54
2016 -0.30 0.37
2017 -0.12 0.66
2018 -1.80 0.52
2019 -3.39 0.14
CAGR (%) -244.50 -26.55
EPS
Millions Allahabad Bank Change (%) Indian Bank Change (%)
2014 21.82 24.76
2015 11.36 -47.95% 21.84 -11.81%
2016 -11.73 -203.25% 15.64 -28.36%
2017 -3.75 -68.01% 30.25 93.41%
2018 -54.19 1344.57% 27.29 -9.81%
2019 -40.33 -25.58% 7.91 -70.99%
Business Segment Revenue: Allahabad Bank
Corporate/ Wholesale Retail Other
Treasury Total
Banking Banking Operations
2014 53,253 96,701 51,328 9,292 2,10,575
 2015 54,308 1,03,297 55,777 5,533 2,18,915
2016 49,683 90,670 63,878 5,837 2,10,068
2017 61,193 67,680 67,916 9,001 2,05,789
2018 60,122 52,272 67,623 14,858 1,94,875
2019 51,692 54,349 66,380 17,274 1,89,695
CAGR -0.59 -10.88 5.28 13.20 -2.07
(%)

Business Segment: Profit: Allahabad Bank

Corporate/ Wholesale Retail Other
Millions Treasury Total
Banking Banking Operations
2014 3,937 12,746 16,407 7,301 40,390
2015 8,795 16,823 16,678 2,676 44,971
2016 9,150 10,521 19,486 2,463 41,620
2017 19,534 -6,198 20,822 4,930 39,088
2018 17,942 -13,615 21,743 9,723 35,793
2019 3,855 -7,293 20,378 9,719 26,659
CAGR (%) -0.42 -189.43 4.43 5.89

Business Segment: Revenue: Indian Bank

Corporate/ Wholesale Retail Other
Millions Treasury Total
Banking Banking Operations
2014 42,001 68,437 54,379 1,457 1,66,275
2015 39,708 71,617 59,667 1,263 1,72,256
2016 45,918 71,224 61,322 1,868 1,80,332
2017 55,621 66,792 58,831 1,372 1,82,616
2018 61,243 67,826 64,380 1,870 1,95,319
2019 54,394 73,346 80,876 2,119 2,10,735
CAGR
5.31 1.40 8.26 7.77
(%)

Business Segment: Profit: Indian Bank

Corporate/ Wholesale Retail Other
Millions Treasury Total
Banking Banking Operations
2014 8,475 10,996 8,148 1,402 29,021
2015 6,715 12,384 9,869 1,137 30,104
2016 9,781 10,308 8,444 1,824 30,357
2017 19,059 10,837 9,274 837 40,007
2018 23,458 13,099 12,159 1,357 50,073
2019 15,523 15,522 16,274 1,465 48,784
CAGR
12.87 7.14 14.84 0.89
(%)

Geographical Segment: Revenue

ALLAHABAD BANK INDIAN BANK
Millions Domestic Change International Change Domestic Change International Change
2014 2,08,488 2,087 1,62,932 3,343
2015 2,16,514 3.85% 2,401 15.07% 1,69,079 3.77% 3,177 -4.96%
-
2016 2,07,354 -4.23% 2,715 13.04% 1,77,476 4.97% 2,857
10.09%
2017 2,02,610 -2.29% 3,180 17.13% 1,79,823 1.32% 2,794 -2.21%
2018 1,91,290 -5.59% 3,585 12.75% 1,92,276 6.93% 3,043 8.93%
 -
2019 1,86,944 -2.27% 2,751 2,06,463 7.38% 4,272 40.39%
23.26%
CAGR
-2.16 5.68 4.85 5.03
(%)

Geographical Segment: Assets

ALLAHABAD BANK INDIAN BANK
Millions Domestic Change International Change Domestic Change International Change
2014 21,15,637 93,882 17,83,069 91,813
-
2015 21,53,272 1.78% 1,23,525 31.57% 18,48,214 3.65% 82,143 10.53%
2016 22,19,403 3.07% 1,45,199 17.55% 19,48,694 5.44% 90,717 10.44%
-
2017 22,50,121 1.38% 1,29,505 -10.81% 21,14,375 8.50% 70,705 22.06%
2018 24,05,927 6.92% 1,31,250 1.35% 24,38,636 15.34% 91,178 28.96%
2019 24,58,764 2.20% 37,002 -71.81% 26,97,875 10.63% 1,06,008 16.26%

NPA: Allahabad Bank

Millions Gross NPAs Net NPAs
Year Opening Addition Reduction Written-off Closing Change Opening Closing Change
2014 51,370 60,212 30,902 0 80,680 41,268 57,218
2015 80,680 50,213 29,923 17,391 83,580 3.59% 57,218 59,789 4.49%
2016 83,580 129,248 22,430 36,553 153,846 84.07% 59,789 102,925 72.15%
2017 153,846 114,170 36,717 24,421 206,878 34.47% 102,925 134,335 30.52%
2018 206,878 129,033 33,791 36,492 265,628 28.40% 134,335 122,291 -8.97%
2019 265,628 107,263 43,013 42,830 287,048 8.06% 122,291 74,193 -39.33%
NPA: Indian Bank
Millions Gross NPAs Net NPAs
Year Opening Addition Reduction Written-off Closing Change Opening Closing Change
2014 35,655 28,323 18,356 0 45,622 23,843 27,637
2015 45,622 33,389 16,809 5,497 56,704 24.29% 27,637 31,470 13.87%
2016 56,704 57,038 16,208 9,264 88,270 55.67% 31,470 54,194 72.21%
2017 88,270 33,307 10,671 12,254 98,651 11.76% 54,194 56,066 3.45%
2018 98,651 50,412 12,746 16,416 119,901 21.54% 56,066 59,596 6.30%
2019 119,901 64,450 22,078 28,738 133,535 11.37% 59,596 67,931 13.99%
No. of Shares: Pre & Post Merger
Millions Allahabad Bank Indian Bank
2014 544.61 480.29
2015 571.38 480.29
2016 613.80 480.29
2017 743.69 480.29
2018 844.04 480.29
2019 2,096.84 480.29
Extra Shares Allotted 241.14
Total Shares Post Merger : Indian Bank 721.43

Merger of Allahabad Bank with Indian Bank: Will It Pay Off?

The merger story of both Allahabad Bank & Indian Bank began in September 2019 when, Finance Minister
Nirmala Sitharaman announced the merger with the aim to form India's seventh-largest Public Sector Bank. Both
the Banks started their operations as Indian Bank since 1st April 2020. The scheme of amalgamation envisaged
an exchange ratio of 115 Indian Bank shares for every 1,000 shares held in Allahabad Bank. After the
transmission of shares took place Shareholders Wealth dropped by 25.25%. Post merger, the total issued share
capital of Indian Bank increased to Rs 7,214.27 million. The consolidation will help Indian Bank to gain
strategic advantage in the Indian Banking sector due to strong presence of Allhabad Bank in the Eastern &
Northern part of India. Post merger, the combined entity will operate with its increased distribution network of
around 6,104 branches, total business of Rs 8,07,859 crore & 42,814 employees.
Projections: The analysts felt that Indian Bank with its product range, risk management and marketing expertise,
would contribute to the smooth running of the combined entity. It was opined that the HDFC Bank with its
service and expertise skills in marketing, manpower, technology, would be able to boost up the revenue of the
combined entity. As per, K Ramachandran, Executive Director Allahabad Bank, “It is good in the sense that the
merger will bring in a lot of more synergies because two big banks are getting merged. The two banks are
roughly of equal size. The core banking platform is same for both the banks. We are predominantly present in the
north and east, and they are present in the south.”

The merger will position the combined entity to significantly exploit opportunities in a market globally
recognized as one of the fastest growing. The merger took place with the aim to make the combined entity the 7 th
largest PSB in India.