Bank of India (BoI) has dipped 2% at Rs 119, also its 52-week low on the BSE. Post July-September (Q2) quarter results, the stock slipped 11% from Rs 133 on November 9 after reported a bleak Q2 with a net loss of Rs 1,100 crore, its second loss in the past three quarters.
Religare Institutional Research expects BOI’s profitability to remain weak and return on equities (ROEs) subdued due to poor loan growth and higher credit costs.
State Bank of India (SBI), the country’s largest lender, was down 1% at Rs 237 on the BSE.
According to analysts at Prabhudas Lilladher, SBI’s management suggested that margins have not yet bottomed out and the recent 40bp cut in base rate will further impact lending yields.
On liability side, despite aggressively cutting deposit rates the bank is still seeing the similar quantum of deposit inflow and deposit repricing will pick?up materially from April?2016 onwards.
The bank is hopeful of significantly cleaning up the balance sheet over next 12?18 months while the write?back from written off accounts (around Rs 40,000 crore) may aid profitability in the medium term, analysts said in a report dated December 7, 2015.
At 02:24 PM, Nifty PSU Bank index was down 1.1% as compared to 0.37% fall in the Nifty 50.