Select PSU banks gain; Dena Bank, UCO Bank up over 5%

Shares of select public sector undertaking (PSU) banks were trading higher by up to 11% on the BSE on the report that the government has asked the Reserve Bank of India (RBI) to prepare a list of suitable banks for merger.

The government seeks to strengthen a banking system laden with bad debt, asked the RBI to suggest a time frame for the consolidation. The move is aimed at creating fewer, better-capitalized lenders and improving regulatory oversight, the Bloomberg report suggested quoting unnamed government official.

United Bank of India, Dena Bank, Uco Bank and Indian Overseas Bank were up in the range of 5% to 11% on the BSE. Corporation Bank, Vijaya Bank, Allahabad Bank, Syndicate Bank, Punjab National Bank and Andhra Bank were up between 1% and 4%. However, State Bank of India (SBI), Indian Bank and Oriental Bank of Commerce were trading 1% lower.

Meanwhile, at 12:15 pm; Nifty PSU Bank index was down 0.38% at 3,273 after hitting a low of 3,248 in intra-day trade on the NSE so far. On comparison, Nifty 50 index was trading lower 0.14% at 11,675 points.

The gross non-performing assets (GNPAs) of the banking sector is likely to improve to 10% in March 2019, from 11.52% as on June 30, 2018, as nearly 60% of the bad loans of the sector are under active resolution. The net NPA is also expected to decrease to 4.3%, from 5.92% as of June-end this year, ICRA said in its report.

With expiry of the 180-day period provided in RBI's February 12 circular for resolution of large stressed borrowers, Icra estimated that 70 big companies accounting for around Rs 3.8 trillion of debt may be heading for resolution under the Insolvency and Bankruptcy Code (IBC), the PTI report suggested. CLICK HERE TO READ FULL REPORT

COMPANY	LATEST	PREV CLOSE	GAIN(%)
UNITED BANK (I)	12.45	11.26	10.57
UCO BANK	20.90	19.75	5.82
DENA BANK	17.25	16.35	5.50
I O B	15.50	14.80	4.73
CORPORATION BANK	27.90	26.90	3.72
VIJAYA BANK	63.40	61.75	2.67
PUN. & SIND BANK	32.40	31.60	2.53
BANK OF MAHA	13.15	12.83	2.49
ALLAHABAD BANK	41.25	40.35	2.23
ANDHRA BANK	32.80	32.20	1.86
J & K BANK	55.40	54.40	1.84
SYNDICATE BANK	39.75	39.20	1.40
BANK OF INDIA	96.35	95.10	1.31
CENTRAL BANK	69.10	68.25	1.25
PUNJAB NATL.BANK	85.20	84.20	1.19
BANK OF BARODA	148.30	147.35	0.64
CANARA BANK	283.35	282.55	0.28
UNION BANK (I)	88.10	87.95	0.17