Canara Bank is a house divided
Two years into a merger with Syndicate Bank, there is little by way of synergy between the two banks and a lot of friction.
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Editor's note: When Syndicate Bank was folded into the larger Canara Bank, they were two among 10 public sector banks whose operations the government merged in April 2020, in spite of resistance from employee unions. On paper, it was supposed to help Canara Bank—the anchor bank in the merger—cement its slot as the fourth largest public sector bank in the country. Also, the government was hoping that merging a weaker Syndicate Bank with a stronger peer would help overcome the former’s lower capital adequacy and higher bad loan ratios. The fact that both shared Karnataka origins made it a match made in heaven. None of the other merged banks had this advantage. Two years on, the move seems to have backfired. On the one hand, the numbers don’t show any kind of synergy produced by the merger. On the other, friction between the employees of Canara Bank and the erstwhile Syndicate Bank has created a deep division in the ranks. All this finds reflection in lower productivity, with interest earned per employee down by 8% and total income per employee down by …
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