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PSU banks rally; Nifty PSU Bank hits six month high

Allahabad Bank, Oriental Bank, Dena Bank, Vijaya Bank, PNB and Corporation Bank were up more than 5% each.

PSU banks rally; Nifty PSU Bank hits six month high
SI Reporter Mumbai
Last Updated : Jul 04 2016 | 12:44 PM IST
Shares of public sector undertaking (PSU) banks were in focus with the Nifty PSU Bank index hitting six-month high on the National Stock Exchange (NSE) in intra-day trade.

Allahabad Bank, Oriental Bank of Commerce, Dena Bank, Vijaya Bank, Punjab National Bank (PNB) and Corporation Bank were up more than 5% each.

Bank of India, Syndicate Bank, Andhra Bank, Indian Bank, Canara Bank, Indian Overseas Bank, Bank of Baroda and State Bank of India (SBI) were up 2%-5% on the NSE.

At 11:33 AM, Nifty PSU Bank index, the largest gainer among sectoral indices was up 3% at 2,822, its highest level since January 5, 2016. The benchmark index Nifty 50 index was up nearly 1%.

In past three-weeks, the PSU Bank index surged 14 as compared to 3.5% rise in the benchmark index. On June 13, 2016, the Reserve Bank of India (RBI) introduced "sustainable structuring of stressed assets" which allows banks to do deep restructuring of stressed projects without any management change.

Antique Stock Broking on PSU banks believes that they are now turning a corner and will witness a very gradual recovery in earnings.

“While we expect asset quality to have bottomed out, we believe that the ageing of non-performing loans (NPLs) coupled with elevated slippage rate (as residual book/restructured assets is also purged of bad loans) will continue to drag earnings,” the broking firm said in a report dated June 13, 2016.

Analysts at ICICI Securities observe that PSU banks do not have any major levers of earnings recovery apart from a revival in economy and fall in G-sec yields.

However, investors found some comfort in certain large private and PSU banks as they disclosed a “watch list” of assets wherein certain stress is expected in future, the report suggest.

Bank 13/06/2016 01/07/2016 LTP % chg# %chg*
Allahabad Bank 52.05 69.65 75.35 8.18 44.76
Pun. & Sind Bank 44.35 47.85 51.30 7.21 15.67
Corporation Bank 35.20 41.25 43.95 6.55 24.86
Oriental Bank 89.25 110.95 118.20 6.53 32.44
Syndicate Bank 65.95 73.35 78.10 6.48 18.42
Dena Bank 29.40 39.40 41.90 6.35 42.52
Punjab Natl.Bank 83.00 105.25 111.15 5.61 33.92
Andhra Bank 49.95 57.55 60.70 5.47 21.52
Vijaya Bank 31.25 37.30 39.20 5.09 25.44
Bank of India 87.30 104.20 109.50 5.09 25.43
Indian Bank 105.45 141.55 148.25 4.73 40.59
IDBI Bank 66.45 71.05 73.90 4.01 11.21
Bank of Maha 28.90 33.05 34.35 3.93 18.86
Canara Bank 192.65 218.35 226.85 3.89 17.75
I O B 25.80 27.15 28.20 3.87 9.30
UCO Bank 36.20 43.40 45.05 3.80 24.45
Union Bank (I) 118.55 131.75 136.25 3.42 14.93
United Bank (I) 18.10 22.45 23.15 3.12 27.90
Bank of Baroda 146.10 156.60 160.85 2.71 10.10
J & K Bank 64.65 68.70 70.20 2.18 8.58
St Bk of India 201.80 219.60 223.90 1.96 10.95
St Bk of Bikaner 499.05 653.40 663.00 1.47 32.85
Central Bank 87.85 106.80 108.30 1.40 23.28
St Bk of Travancore 392.20 490.40 496.30 1.20 26.54
St Bk of Mysore 452.90 668.50 675.90 1.11 49.24
           
LTP: Last traded price on NSE in Rs at 12:07 PM
# Change over July 1, 2016
* Change over June 13, 2016

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First Published: Jul 04 2016 | 12:21 PM IST

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