The Hindu Business Line : High NPA bank stocks show buoyancy

SHARES of banks and financial institutions, especially those with high NPAs (non-performing assets), shot into the limelight on Thursday following the `historical judgment' by the Supreme Court in the Mardia Chemicals and ICICI Bank case.

Banks that were in the limelight after the judgment include Bank of India (up 3.21 per cent at Rs 67.55), Bank of Baroda (up 2.42 per cent at Rs 254.25), Canara Bank (up 2.0 per cent at Rs 154) and ICICI Bank (up Rs 0.86 per cent at Rs 292.25).

Even shares of financial institutions — IDBI (up 1.97 per cent at Rs 69.80) and IFCI (up 5.23 per cent at Rs 10.26), which have high level of NPAs, also closed higher.

However, shares of Oriental Bank of Commerce were down 0.12 per cent at Rs 320.95 and Corporation Bank was down 1.20 per cent at Rs 312.45, as their NPAs are low compared to the entire banking industry.

Brokers said this was good (SC order) for the banks' stocks as the order will help banks to reduce NPAs and clean-up their balance sheets.

But some brokers said quashing the 75 per cent deposit provision was not y positive for banks. They said this was also the reason for heavy selling in bank stocks in the last one hour of trading. This led to most of the banks stock closing lower from their day's high. They said SBI closing by 0.37 per cent at Rs 623.05 from previous closing was clear indicator of this.

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