Select PSBs gain on capital infusion by government

Bank of India, IDBI Bank, Central Bank, Uco Bank, Dena Bank and Bank of Maharashtra were trading higher by up to 6% in early morning trade

Shares of select public sector banks (PSBs) like Bank of India, IDBI Bank, Central Bank of India, Uco Bank, Dena Bank and Bank of Maharashtra were trading higher by up to 6% in early morning trade after the government has pumped in a combined capital of Rs 7,577 crore in these banks.

At 09:30 am, Nifty PSU Bank index was up 0.44% as compared to 0.11% decline in Nifty 50 index and 0.02% fall in Nifty Private Bank index.

State-owned Bank of India said it has received a capital infusion worth Rs 2,257 crore, which was recently placed under prompt corrective action by the Reserve Bank of India.

"The bank has on December 29 received an infusion of Rs 2,257 crore from Government of India in form of common equity tier-1 capital, which is being kept as share application money and would be allotted after due procedure/conditions for allotment," the bank said in a regulatory filing to the BSE.

On October 24, the government had approved a recapitalisation plan for strengthening NPA-hit state-run banks to a tune of Rs 2.11 lakh crore. This capital infusion is timely and would help these banks shore up their capital adequacy.

While IDBI Bank has got capital support of Rs 2,729 crore, followed by UCO Bank (Rs 1,375 crore), Bank of Maharashtra (Rs 650 crore), Central Bank of India (Rs 323 crore) and Dena Bank (Rs 243 crore).

In calendar year 2017, Dena Bank, Bank of Maharashtra, IDBI Bank, Central Bank of India and UCO bank recorded negative returns up to 23%. On comparison, the Nifty 50 index and Nifty PSU Bank index reported positive returns of 29% and 24%, respectively, till Friday.

COMPANY	LATEST	PREV CLOSE	GAIN(%)
CENTRAL BANK	77.00	72.60	6.1
UCO BANK	30.70	29.80	3.0
BANK OF MAHA	23.50	22.85	2.8
IDBI BANK	61.30	59.85	2.4
BANK OF INDIA	173.45	169.70	2.2
BANK OF BARODA	162.85	160.50	1.5
VIJAYA BANK	69.10	68.35	1.1
ORIENTAL BANK	121.95	120.70	1.0
DENA BANK	25.55	25.30	1.0