PSU banks trade mixed ahead of RBI board meet outcome
Nifty PSU Bank index, the largest loser among sectoral indices, was down 0.82% at 12:07 PM; after gaining 5% in past four trading days on the NSE till Friday.
 "PSU banks trade mixed ahead of RBI board meet outcome")
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Shares of public sector banks (PSBs) were trading on a mixed note ahead of the Reserve Bank of India (RBI) board meeting today.
Bank of Maharashtra, Syndicate Bank, Vijaya Bank and Central Bank of India were up 2% each, while Dena Bank, Andhra Bank, Bank of Baroda, Corporation Bank, Indian Overseas Bank and Allahabad Bank were up 1% each.
However, State Bank of India, Oriental Bank of Commerce, Bank of India, Union Bank of India and Canara Bank were down in the range of 1% to 3% on the NSE.
At 12:07 PM; Nifty PSU Bank index, the largest loser among sectoral indices, was down 0.82%, as compared to 0.26% rise in the Nifty 50 index. In the past four trading days, the PSU bank index had gained 5%, against 0.94% rise in the benchmark index.
Over the past few days, the government and the RBI have had discussions in a bid to arrive at a common ground on at least two demands of the government — easing prompt corrective action framework (PCA) norms for some banks along with aligning the regulatory capital requirement of banks with international norms and a special dispensation for micro, small and medium enterprises (MSMEs).
According to Business Standard report, the RBI may agree to bring some PSBs out of the PCA, but it is not likely to accede to the government’s demand to set up a special refinance window for non-banking financial companies (NBFCs) at the board meeting of the central bank on Monday.
Some banks may be brought out of the PCA framework, an early warning tool used by the RBI, if the government agrees to the central bank’s terms related to fulfilling their capital needs, added reported quoting sources. CLICK HERE TO READ FULL REPORT
According to CARE Ratings, the NPA ratio of PCA banks has increased from 16.0% in March 2017 to 20.5% in March 2018 and is marginally up now to 21.0% in September.
“Given the restrictions on further lending it may be conjectured that this increase has been due to the recognition process. It is still uncertain whether the NPA levels have peaked or whether there could be new additions in the coming months. The absolute levels are lower in Q1 and Q2 compared with Q4 of last year but due to shrinking of the size of the loan book has increased as a ratio,” the rating agency said in a report.
State-owned banks currently under PCA are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.
Bank of Maharashtra, Syndicate Bank, Vijaya Bank and Central Bank of India were up 2% each, while Dena Bank, Andhra Bank, Bank of Baroda, Corporation Bank, Indian Overseas Bank and Allahabad Bank were up 1% each.
However, State Bank of India, Oriental Bank of Commerce, Bank of India, Union Bank of India and Canara Bank were down in the range of 1% to 3% on the NSE.
At 12:07 PM; Nifty PSU Bank index, the largest loser among sectoral indices, was down 0.82%, as compared to 0.26% rise in the Nifty 50 index. In the past four trading days, the PSU bank index had gained 5%, against 0.94% rise in the benchmark index.
Over the past few days, the government and the RBI have had discussions in a bid to arrive at a common ground on at least two demands of the government — easing prompt corrective action framework (PCA) norms for some banks along with aligning the regulatory capital requirement of banks with international norms and a special dispensation for micro, small and medium enterprises (MSMEs).
According to Business Standard report, the RBI may agree to bring some PSBs out of the PCA, but it is not likely to accede to the government’s demand to set up a special refinance window for non-banking financial companies (NBFCs) at the board meeting of the central bank on Monday.
Some banks may be brought out of the PCA framework, an early warning tool used by the RBI, if the government agrees to the central bank’s terms related to fulfilling their capital needs, added reported quoting sources. CLICK HERE TO READ FULL REPORT
According to CARE Ratings, the NPA ratio of PCA banks has increased from 16.0% in March 2017 to 20.5% in March 2018 and is marginally up now to 21.0% in September.
“Given the restrictions on further lending it may be conjectured that this increase has been due to the recognition process. It is still uncertain whether the NPA levels have peaked or whether there could be new additions in the coming months. The absolute levels are lower in Q1 and Q2 compared with Q4 of last year but due to shrinking of the size of the loan book has increased as a ratio,” the rating agency said in a report.
State-owned banks currently under PCA are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.
| 1-year high | 1-year low | |||||
| Bank | Date | Price | Date | Price | Price* | % gain# |
| Oriental Bank | 25/01/2018 | 136.35 | 09/10/2018 | 58.00 | 91.75 | 58.2 |
| I O B | 05/01/2018 | 25.40 | 08/10/2018 | 10.85 | 15.00 | 38.2 |
| Union Bank (I) | 17/11/2017 | 181.00 | 26/10/2018 | 61.25 | 82.60 | 34.9 |
| Corporation Bank | 24/11/2017 | 44.60 | 08/10/2018 | 20.90 | 27.75 | 32.8 |
| Allahabad Bank | 17/11/2017 | 82.00 | 09/10/2018 | 33.15 | 43.35 | 30.8 |
| IDBI Bank | 05/03/2018 | 91.50 | 05/07/2018 | 47.00 | 60.90 | 29.6 |
| Canara Bank | 21/11/2017 | 401.70 | 23/10/2018 | 204.75 | 263.70 | 28.8 |
| UCO Bank | 25/01/2018 | 36.65 | 08/10/2018 | 15.25 | 19.40 | 27.2 |
| Bank of Maha | 28/11/2017 | 28.80 | 11/10/2018 | 10.70 | 13.60 | 27.1 |
| United Bank (I) | 29/12/2017 | 19.50 | 08/10/2018 | 8.90 | 11.30 | 27.0 |
| Bank of Baroda | 17/11/2017 | 191.85 | 11/10/2018 | 91.00 | 115.20 | 26.6 |
| Punjab Natl.Bank | 17/11/2017 | 200.90 | 28/09/2018 | 58.45 | 73.20 | 25.2 |
| St Bk of India | 17/11/2017 | 346.70 | 23/03/2018 | 232.35 | 290.90 | 25.2 |
| Dena Bank | 25/01/2018 | 27.85 | 17/07/2018 | 13.70 | 16.55 | 20.8 |
| Syndicate Bank | 27/11/2017 | 95.90 | 09/10/2018 | 29.50 | 35.60 | 20.7 |
| Bank of India | 17/11/2017 | 216.80 | 25/10/2018 | 73.20 | 88.15 | 20.4 |
| Pun. & Sind Bank | 24/11/2017 | 51.45 | 01/10/2018 | 25.00 | 29.75 | 19.0 |
| Andhra Bank | 17/11/2017 | 67.55 | 29/10/2018 | 25.25 | 28.80 | 14.1 |
| Central Bank | 17/11/2017 | 94.00 | 11/10/2018 | 27.45 | 31.10 | 13.3 |
| Indian Bank | 17/11/2017 | 427.40 | 24/10/2018 | 210.40 | 229.15 | 8.9 |
| Vijaya Bank | 24/11/2017 | 76.60 | 22/10/2018 | 39.95 | 43.30 | 8.4 |
| *Price on NSE in Rs as on November 16, 2018 # % change over 52-week low price | ||||||
| Source: CapitalinePlus | ||||||
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