Mumbai: The four mega bank mergers of the state-owned (PSU) banks that the government announced last week will not lead to better asset quality and profitability of the merged entities, Moody's investor services has said.
The rating firm said that the mergers which it expects to be completed by the middle of the next year will significantly alter the structure of PSU banking but the "asset quality and profitability will remain broadly unchanged after consolidation".
"PSU banks already score poorly on these two factors, and there is no reason to assume that the merged entities will make significant improvements in these metrics," it said.
