Here is how shares of SBI, associate banks performed after merger approval

Shares of State Bank of India gained over 4 per cent to highest since August 24 after the SBI board approved merger of its five associate banks and Bharatiya Mahila Bank with itself.

The stock was the top gainer on Sensex and Nifty and hit an intraday high of Rs 257.20, up 3.62 per cent on the BSE.

Stocks of associate banks showed mixed trend. State Bank of Bikaner and Jaipur added 3.95 per cent, State Bank of Travancore was up 8.72 per cent, while State Bank of Mysore bucked the trend to plunge over 12 per cent.

The two unlisted subsidiaries are fully owned by SBI.

Branch rationalization could be key synergy benefit from merger and cost savings would lower cost-to-income ratio in the long term, told Motilal Oswal analysts to Reuters.

Analysts at Nirmal Bang Equities believe share swap ratios suggest upside of 3 per cent for SBBJ, 8 per cent for SBT and downside of 12 per cent for SBM.

The merger will create a banking behemoth of global scale with a balancesheet of Rs 37 trillion or over $555 billion, making it one of the top 50 global financial powerhouses. The merged entity will have 22,500 branches and 58,000 ATMs serving a customer base of over 50 crore.

(With inputs from agencies)