Bank of Baroda (BoB) posted a weak earnings in the third quarter of financial year 2020. The net loss has expanded and slippages continued to be at elevated level.

Sanjiv Chadha, MD and CEO of the bank, told CNBC-TV18 the merger of Bank of Baroda with Vijaya Bank and Dena Bank will save Rs 9,000 crore over a period of five years.

He said it would take at least 12 months for technology integration of these banks. However, consolidation of retail portfolio will take some time, he said.

According to him, the bank is well-positioned for growth, especially among PSU banks.

He added slippages will start going down from the next quarter onwards. "Part of that is reflected in the watch-list numbers, which have come down. So, I would believe that if you look at the next quarter and the next year, we should be having lower numbers in terms of slippages."

“If you were to keep the impact of the divergence apart, the results would have been largely in line with what the investors would have expected despite the bank being in a change mode."

Despite consolidation, the bank has been able to post nearly a double-digit growth in current account savings account (CASA) ratios, net interest income (NII) and also pretty robust growth in certain sectors such as car loans, he said.

Chadha said considering all the above factors he believed the results were largely in-line with what investors might have expected.

In terms of merger, he said: “In terms of order of magnitude, this is a merger which is substantially more complex. Also, it was a conscious decision and I believe the right one, to make sure that the merger is as little disruptive as is possible."

So, when you have a non-disruptive process then it needs to play out over a longer period of time, which it is playing out, he added.

"Therefore, when one looks at the fundamentals of the merger being complete including technological upgrade, one is looking at a 12-month period and in terms of the benefits being available to the bank, they should start flowing in now but the estimate is that they would be cost-saving about Rs 9,000 crore over a five-year period.”

He asserted that overall the climate has been very positive in terms of growth.