You are here: Home » Markets » News
Business Standard

PSBs rally: Oriental Bank, Corporation Bank, and UCO Bank soar 20%

Andhra Bank, Syndicate Bank, Bank of Maharashtra, United Bank of India and Indian Overseas Bank were up in the range of 10 per cent and 16 per cent.

SI Reporter  |  Mumbai 

Foreign brokerages

Shares of public sector banks (PSBs) continued to be in focus with most of the names rallying more than 10 per cent on Tuesday, extending their past two days' gain after the Supreme Court judgement on Essar Steel resolution in favor of financial creditors.

Oriental Bank of Commerce (Rs 62.70), Corporation Bank (Rs 26.45) and UCO Bank (Rs 15.58) were locked in the upper circuit of 20 per cent on the BSE. Andhra Bank, Syndicate Bank, Bank of Maharashtra, United Bank of India and Indian Overseas Bank were up in the range of 10 per cent and 16 per cent.

At 02:51 pm, Nifty PSU Bank index, the largest gainer among sectoral indices, was up 3.6 per cent, as compared to a 0.18 per cent rise in the Nifty 50 index. In the past three trading days, the PSU Bank index has rallied 8.5 per cent against 0.02 per cent rise in the benchmark index.

“The Supreme Court judgement have huge positive on pace of receivable for lenders, which could see liquidity return fast with credit growth spurt in the near future,” according to IIFL Securities.

While the asset quality of the PSBs is improving, they recorded a net loss during September quarter (Q2FY20) after having recorded a net profit in the first quarter of FY20.

“The PSBs registered a contraction in their gross non-performing asset (GNPA) amount by (-)10 per cent and stood at Rs 727,296 crore for Q2FY20 as compared with Rs 807,937 crore in Q2FY19. The GNPA Ratio for the PSBs stood at 11.6 per cent for the quarter under review as against 13.5 per cent in Q2FY19. The PSBs have been witnessing a marked decline in their stressed assets over the past couple of quarters,” CARE Ratings said in Q2FY20 BFSI update.

“PSU banks cost-to-income ratio improved qoq mainly led by better revenue performance, which was driven by strong treasury gains. With improving liquidity in the system and new funding lines from PSU banks towards the end of the quarter, general management commentary on funding and growth in 2H is positive,” analysts at Kotak Institutional Equities said in a banking sector update.

First Published: Tue, November 19 2019. 15:19 IST
RECOMMENDED FOR YOU