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PSBs in focus; SBI, Bank of Baroda, Canara Bank up over 2%

Nifty PSU Bank index, the largest gainer among sectoral indices, was up 2.5% as compared to 0.96% rise in the Nifty 50 index, at 11:33 am.

SI Reporter  |  Mumbai 

SBI
SBI

Shares of public sector banks (PSBs) are in focus with Nifty PSU Bank index gaining more than 2% on Monday, ahead of the Allahabad Court verdict on stressed power assets as the Reserve Bank of India (RBI) deadline ends today.

The RBI’s February 12 circular said all stressed assets will either get resolved by August 27 or get taken to the NCLT.

According to a Business Standard report, “State Bank of India (SBI), the country’s largest lender, on Friday said about seven-eight power sector projects worth Rs 170 billion is likely to be resolved soon, as lenders are nearing a consensus on them.” CLICK HERE TO READ FULL REPORT

SBI, Bank of Baroda (BOB), Canara Bank, Union Bank of India and Bank of India were up more than 2% on the National Stock Exchange (NSE). Andhra Bank, Oriental Bank of Commerce, Allahabad Bank, Syndicate Bank, Indian Bank and Punjab National Bank (PNB) up in the range of 1% to 2%.

At 11:33 am; Nifty PSU Bank index, the largest gainer among sectoral indices, was up 2.5% as compared to 0.96% rise in the Nifty 50 index. Nifty Private Bank and Nifty Bank were up 1.5% each.

Meanwhile, Moody's Investors Service, last week, said that the Indian government's plan to provide more capital support for its public sector banks in the year ending March 2019 (fiscal 2019) will restore capital adequacy and improve loan-loss coverage at many loss-making banks, but stress will persist.

The government currently plans to provide Rs 650 billion of new capital for public sector banks in fiscal 2019 after infusing Rs 900 billion in the prior year. Of the Rs 650 billion, the government allocated Rs 113 billion to five banks in July.

At the same time, Moody's considers that the public sector banks' external capital needs will not grow much further after fiscal 2019 because their profitability will gradually improve as credit costs moderate in tandem with progress in ongoing balance-sheet clean-ups.

COMPANY LATEST PREV CLOSE GAIN(%)
CANARA BANK 286.20 276.35 3.56
UNION BANK (I) 88.85 86.65 2.54
ST BK OF INDIA 307.60 300.45 2.38
BANK OF BARODA 150.90 147.40 2.37
BANK OF INDIA 95.10 93.10 2.15
ANDHRA BANK 33.00 32.55 1.38
ORIENTAL BANK 82.10 81.00 1.36
PUNJAB NATL.BANK 86.75 85.80 1.11

First Published: Mon, August 27 2018. 11:53 IST
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