PSU banks extends gain, Indian Bank soars 10%

Shares of public sector undertaking (PSU) banks are trading higher by up to 10%, extending their past two days rally on the National Stock Exchange (NSE).

CNX PSU Bank index has rallied over 10% in past three trading sessions after select banks reported better-than-expected earnings for the quarter ended September 2013 (Q2).

Indian Bank, Dena Bank, Syndicate Bank, Central Bank, Andhra Bank and Corporation Bank are up 1-10% on BSE.

Bank of India has rallied 29% in past three trading sessions on reporting better than expected numbers both on the operating as well as on the asset quality front.

On the asset quality front, not only did the bank witness sequentially lower slippages (slippages rate of 2% as compared to 2.8% in previous quarter), but they also reported much better recoveries and upgrades performance (around Rs 900 crore as compared to Rs 700 crore in 1QFY2014 and average quarterly run-rate of Rs 500 crore over last four quarters), says analyst at Angel Broking in a note.

Allahabad Bank has gained 17% in past three days after reported a better than expected net profit at Rs 276 crore in Q2 against an average analyst estimate of Rs 243 crore. The bank’s net NPA ratio declined to 3.83% from 3.87% in previous quarter.