Millennium Post

‘No drastic job cuts after KMB-ING Vysya merger’

‘We believe total number of employees will grow over time, but we don't see any dramatic reduction in the net number of people in a hurry,’ the Executive Vice-Chairman and Managing Director of Kotak Bank Uday Kotak said after he announced the merger deal on Thursday.

‘We have no plans to do any massive rationalisation of branches or capacity. We are committed to growing, this is a merger for growth, not for cutting,’ he said, answering a specific question on whether KMB will be pruning some jobs.

ING Vysya Bank Deputy Chief Executive Uday Sareen said cost cutting was not the objective of the merger.

‘At the heart of this deal is not cost-efficiency; yes it is cost-avoidance as there are synergies post-merger. But this is not one merger which talks about cost cutting and that is an extremely important point which we would like to communicate,’ Sareen said. ‘In any merger, there is a concern among employees...but at the heart of this partnership is our people,’ Sareen added.

Some analysts have said that KMB may have to prune its expenses. In a service industry like banking, people are a major cost component. Meanwhile, Kotak said the merged KMB will not look at having a presence internationally.

‘We will leverage on our cooperation arrangements, we believe the India opportunity is where we are good at and the core business model is to concentrate on the country's diversified financial services,’ Kotak said.

Kotak Mahindra Bank scrip up 4%

Shares of Kotak Mahindra Bank on Friday ended nearly 4 per cent higher, after the private sector lender announced the acquisition of ING Vysya Bank in an all-stock deal valued at Rs 15,000 crore. After surging 8.97 per cent to Rs 1,260.90 — their all-time high in intra-day trade at the BSE, shares of Kotak finally ended at Rs 1,199.65, up 3.68 per cent from previous close.Shares of ING rose by 0.32 per cent to end at Rs 816.80. In intra-day, it had gained 4.27 per cent to hit Rs 849.

BSE Sensex too cheers merger

The benchmark Sensex on Friday surged 267 points in its best gain this month to end at record high of 28,334.63 after banking shares rose following Kotak Mahindra-ING Vysya deal, while hopes of big-bang reforms in upcoming Winter session of Parliament also boosted sentiments.

The NSE Nifty barometer also jumped 75.45 points to close at a fresh peak of 8,477.35 amid positive global cues after US shares provided another lead on Thursday on the back of encouraging economic data.
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