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PSU banks slide; Allahabad Bank, Oriental Bank hit 52-week low

In the past 30 days, the CNX PSU Bank index has lost 9% as compared to 4% fall in the CNX Nifty

Puneet Wadhwa  |  New Delhi 

Stocks of public sector banks (PSBs) are facing selling pressure with the CNX PSU Bank index, a gauge of public sector banks, slipping nearly 2.3% in trade today at 14:40 hours. By comparison, the CNX Nifty was trading 1.6% lower at 7,991 levels down 1.6%, or 133 points.

In the past 30 days, the CNX PSU Bank index has lost 9% as compared to 4% fall in the CNX Nifty.

Among individual stocks, Union Bank of India, IDBI Bank, Oriental Bank of Commerce, Punjab National Bank (PNB), State Bank of India (SBI) and Indian Overseas Bank lost between 2.5% - 4.7% in trade today till 14:40 hours.

Of these, Bank of India, Indian Overseas Bank, Allahabad Bank, IDBI Bank and Oriental Bank of Commerce hit their respective 52-week low level in trade today on the NSE.

Bank Nifty, too, was trading around 2% lower. Among the private banks, YES Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank and ICICI Bank slipped 1.5% - 3.2%.

Says Kunal Bothra, head - advisory, LKP Securities: “The PSU banking pack has been under pressure. I think this pain will continue and the stocks will continue to languish. The recent results have not been too encouraging and then there is the NPA (non-performing assets) overhang. This will continue for at least two quarters for the PSU banks. Mid-cap PSU banks will suffer the most. Bank of India, Andhra Bank, Allahabad Bank are a few such banks that will face challenging times ahead.”

Meanwhile on Thursday, the Reserve Bank of India (RBI) made a case for developing better strategies to deal with the problem of bad loans as hiding them would aggravate the situation for the banks as well as borrowers. According to reports, gross NPAs of PSU banks stood at Rs 2,60,531 crore or 5.6% of the total advances as of December 2014. CLICK HERE FOR THE FULL REPORT

The top 30 defaulters are sitting on bad loans of Rs 95,122 crore, which is more than one-third of the entire NPAs of public sector banks.

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First Published: Thu, June 11 2015. 15:15 IST