PSBs extend fall; Bank of Baroda, PNB and Oriental Bank hit 5-year low

Shares of public sector banks (PSBs) continued to reel under pressure and were trading lower for the second straight day with five banks hitting five-year low on Monday as analysts believe the country’s state-owned banking industry is not out of the woods yet.

Bank of Baroda (BoB), Punjab National Bank (PNB), Oriental Bank of Commerce, Allahabad Bank and Union Bank of India (UBI) has hit their respective five-year lows on the National Stock Exchange (NSE) in the intra-day trade. Indian Bank and Jammu & Kashmir Bank from the Nifty PSU Bank index also hit their fresh 52-week lows.

At 02:57 pm, Nifty PSU Bank index, the top loser among sectoral indices, was down 2.7 per cent, as compared to a 0.4 per cent decline in the benchmark Nifty 50 index, Nifty Bank and Nifty Private Bank index.

In the past two trading days, Nifty PSU Bank index slipped nearly 5 per cent, against 1 per cent decline in the Nifty 50 index. In the past two months, it has tanked 16 per cent, as compared to less than 1 per cent fall in the benchmark index.

The Supreme Court (SC) has come out heavily on the Department of Telecommunications (DoT) for not recovering adjusted gross revenue (AGR) liability from the telecom companies and asked the operators to pay the dues before the next hearing on March 17, 2020. Total AGR liability stands at Rs 1.47 trillion of which Bharti Airtel/Vodafone Idea need to pay Rs 34,000 crore/Rs 44,000 crore.

According to Motilal Oswal Securities view, this will have an impact on the banks’ asset quality as Vodafone Idea faces an imminent risk of shutdown.

Meanwhile, six of the 18 PSBs were in losses in the December quarter. In the previous quarter, five had been in the red. The two new entrants in the “loss club” are PNB and BoB, while Union Bank of India, which had made a loss of Rs 1,194 crore in September, bounced back into the black. Overall, PSBs made a net loss of Rs 2,712 crore against Rs 727 crore in September and Rs 7,384 crore a year ago.

According to a Business Standard report, India’s state-owned banking industry is not out of the woods as yet. Fresh slippages are staring at many of them. Also, unless they start lending, it will be difficult to pare their non-performing assets (NPAs) as this is computed as a percentage of their loan book. CLICK HERE TO READ FULL REPORT

COMPANY LATEST 1-MTH BEFORE LOSS(%)
ALLAHABAD BANK 14.65 18.70 -21.7
ORIENTAL BANK 43.65 55.30 -21.1
CANARA BANK 175.30 221.55 -20.9
SYNDICATE BANK 22.60 28.20 -19.9
INDIAN BANK 82.20 102.05 -19.5
I O B 9.17 11.38 -19.4
PUN. & SIND BANK 16.90 20.65 -18.2
PUNJAB NATL.BANK 52.20 63.20 -17.4
BANK OF BARODA 82.70 97.30 -15.0
UCO BANK 13.95 16.25 -14.2
ANDHRA BANK 15.20 17.55 -13.4
BANK OF MAHA 11.80 13.60 -13.2
UNITED BANK (I) 7.85 9.01 -12.9
UNION BANK (I) 46.70 52.60 -11.2
BANK OF INDIA 61.30 68.80 -10.9



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