PSBs in focus; Andhra Bank, Syndicate Bank, PNB up 5%

Shares of public sector banks (PSBs) were in focus with Andhra Bank, Syndicate Bank and Punjab National Bank (PNB) rallying over 5% each on the National Stock Exchange (NSE) amid reports that the government may announce capital infusion plan for the state-run banks.

State Bank of India (SBI), Bank of Baroda, Bank of India, Central Bank of India, Oriental Bank of Commerce, IDBI Bank and Union Bank of India were up in the range of 3% to 4%.

At 12:27 PM; Nifty PSU Bank index, the largest gainer among sectoral indices, was up 3.5% at 3,086, as compared to 0.72% rise in Nifty Bank and 0.48% gain in Nifty Private Bank index. The benchmark Nifty 50 was up 0.38%.

On Thursday, October 19, 2017, the Nifty PSU Bank index closed at 2,943 - its lowest level since January 5, 2017 - and had slipped 21% from its recent closing high of 3,723 on July 31, 2017.

By comparison, the benchmark Nifty 50 was up 1%, while Nifty Bank (down 4%) and Nifty Private Bank index (down 1%) were down less than 5% during the period.

Meanwhile, Moody's Investors Service has said that the ongoing rounds of nonperforming loan (NPL) resolutions initiated by the Indian central bank hold the key to the State Bank of India's (SBI, Baa3 positive, ba1) credit profile.

"The resultant haircut on SBI's assets will likely show a substantial impact," said Alka Anbarasu, a Moody's Vice President and Senior Analyst in a note. Adding, "Our scenario analysis concludes that SBI can absorb haircuts of up to 50%-55%, while maintaining a common equity Tier 1 ratio of above 9.5% at the end of March 2019. Such a common equity Tier 1 ratio would give the bank some buffer above the minimum regulatory requirement of 8.6% by March 2019."

SYNDICATE BANK 71.45 67.45 5.9
PUNJAB NATL.BANK 138.15 130.90 5.5
ANDHRA BANK 57.50 54.70 5.1
CENTRAL BANK 79.40 76.30 4.1
UNION BANK (I) 131.65 126.65 4.0
BANK OF BARODA 143.00 137.85 3.7
BANK OF INDIA 140.00 135.00 3.7
ALLAHABAD BANK 68.00 65.60 3.7
ORIENTAL BANK 117.95 113.85 3.6
IDBI BANK 53.65 51.80 3.6
CANARA BANK 315.75 305.80 3.3
ST BK OF INDIA 253.50 245.75 3.2
UCO BANK 29.95 29.05 3.1
VIJAYA BANK 60.60 58.85 3.0
I O B 22.70 22.05 3.0

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