PSBs rally post SBI March quarter results; Nifty PSU Bank index up 7%

SBI, Jammu & Kashmir Bank, Punjab National Bank, Bank of Baroda, Canara Bank and Indian Bank were all up in the range of 7 per cent to 10 per cent on the NSE

Shares of public sector banks (PSBs) rallied up to 10 per cent on Friday on the National Stock Exchange (NSE) after the State Bank of India (SBI) reported improvement in assets quality on year-on-year (YoY) as well as sequential basis.

SBI, Jammu & Kashmir Bank, Punjab National Bank (PNB), Bank of Baroda, Canara Bank and Indian Bank among the PSBs were up in the range of 7 per cent to 10 per cent on the NSE.

At 03:00 pm, Nifty PSU Bank index, the top gainer among sectoral indices, was up 6.9 per cent, as compared to 1.2 per cent rise in the benchmark Nifty50 index.

Shares of SBI surged 9 per cent to Rs 190 after the bank registered a net profit of Rs 3,581 crore in the fourth quarter ended March 2020 (Q4FY20), against Rs 838 crore clocked in the year-ago quarter. The reported profit was supported by one-time gain of Rs 2,731 crore from the stake sale in SBI Cards carried out during the quarter.

The bank’s assets quality improved on a YoY as well as on sequential basis. The bank’s gross non-performing assets (GNPA) ratio came in at 6.15 per cent against 7.53 per cent, while the net NPA ratio came in at 2.23 per cent against 3.01 per cent in the year-ago quarter. GNPA and NNPA stood at 6.94 per cent and 2.65 per cent, respectively, in December 2019 quarter.

However, net interest income (interest earned minus interest expenses) during the quarter declined 0.81 per cent to Rs 22,767 crore from Rs 22,954 crore in the corresponding quarter of previous fiscal. Net interest margin was down by 8 basis points YoY to 2.94 per cent from 3.02 per cent.