PSU bank shares dip, CNX PSU Bank down 3%

Shares of public sector undertaking (PSU) banks are under pressure in noon trades bourses after reporting weak set of financial numbers for the quarter ended June 2012 and asset quality concerns.

The National Stock Exchange, state-owned bank index, CNX PSU Bank, the largest loser among sectoral indices, is down almost 3% as compared to 1.2% rise in benchmark Nifty at 1400 hours.

Union Bank of India, Punjab National Bank, Bank of India, Oriental Bank of Commerce, Andhra Bank and Indian Overseas Bank are down more than 3% each. State Bank of India, Bank of Baroda, Allahabad Bank and Canara Bank are down 2-3% on the NSE.

 

Union Bank of India has plunged 9% to Rs 163 on reporting deterioration in asset quality in the June quarter. The bank’s gross non-performing assets (NPA), as a percentage of gross advances, jumped to 3.76% in the June quarter against 3.01% in the corresponding quarter last year. Quarterly net NPAs jumped to 2.2% of advances against 1.70% previous quarter.

Punjab National Bank has tanked 5.3% at Rs 716 after the bank said the gross NPA in June quarter went up to 3.34% from 2.93% in March quarter. In absolute terms, the gross NPA stood at Rs 9,988 crore compared to Rs 8,720 crore in the previous quarter. Net NPAs also increased to 1.68% of at the advances to Rs 4,917 crore.

“Punjab National Bank has reported higher than estimates net interest income growth of 19% at Rs 3,690 crore and profit after tax of Rs 1,250 crore; however increase in gross NPA by 15% to Rs 9,990 crore disappointed the market. Going forward recovery and up gradations of NPA would be key for re-rating in stock,” said analyst at Motilal Oswal Research.

Bank of India too, dipped 5% at Rs 292 on the NSE. The bank said the gross NPA in June quarter went up to 2.56% from 2.34% in previous quarter.