Corporation Bank surges 68% in three days post Essar Steel ruling

Shares of Corporation Bank were locked in 20 per cent upper circuit at Rs 26.45 on the BSE on Tuesday, thus zooming 68 per cent in past three trading days, after the Supreme Court ruled in favor of financial creditors in its verdict on Essar Steel resolution .

The state-owned lender's stock price has soared 94 per cent from its 52-week low of Rs 13.60 touched on October 15, 2019.

The counter saw nearly six-fold jump in trading volumes today. Till 10.36 am, a combined 1.2 crore shares changing hands on the NSE and BSE. There were pending buy orders for 946,165 shares on both the exchanges.

The Supreme Court (SC) on Friday said the National Company Law Appellate Tribunal (NCLAT) should not interfere with the decisions of the committee of creditors (CoC) in the Essar Steel insolvency case.

In terms of results, Corporation Bank had reported a 26 per cent rise in its net profit to Rs 130 crore for the second quarter ended September 30, on the back of lower provisioning for bad loans.

The lender's asset quality witnessed improvement as the gross non-performing assets (NPAs) fell to 15.43 per cent (Rs 20,823 crore) of the gross advances at the end of September 2019, compared with 17.46 per cent (Rs 21,714 crore) by the year-ago period. Net NPA or bad loans fell substantially to 5.59 per cent (Rs 6,751 crore), against 11.65 per cent (Rs 13,534 crore) a year ago.

In a separate development, Union Bank of India has submitted to the exchanges that “The bank has received a communication from ministry of finance on November 16, 2019 stating that the alternative mechanism has accorded in-principle approval to proposed amalgamation of the Andhra Bank and Corporation Bank into Union Bank of India.”