Growing fears over NPAs spook PSU bank stocks

R. Yegya Narayanan | | Updated on: Mar 12, 2018

Fears over the growing non-performing assets (NPAs) among the public sector banks spooked the stock prices of PSU banks. The scrips of other PSU banks which were yet to declare first quarter results for FY 2012-13 were too badly hit.

The investors’ fears could be gauged from the fact that all the 6 NSE Bank Nifty’s PSU bank stocks ended in the red at the close today. In case of at least two of them, the losses were substantial.

But some of the private banks stocks in the bank index moved in the opposite direction, apparently buoyed by the results of ICICI bank that trimmed its NPAs. Still, two of the private banks ended as losers.

The concern over the high NPAs among the PSU banks was so strong that shares of PNB, which, while showing higher Q 1 profit this year, also showed a spike in NPA percentage, that sent its stock hurtling near to its 52 week lows. The stock came very close to breaching its 52 week low post-results that showed a higher NPA percentage in Q 1 of this year. After falling to a low of Rs 708 (its 52 week low is Rs 703.50), the share recovered to close at Rs 718.50, a loss of Rs 37.45.

Union Bank of India shed Rs 13.95 to close at Rs 164. This bank also saw its NPAs move up. The stock hit a low of Rs 161 today which was rather near its 52 week low of Rs 155.45.

The other major PSU bank losers were Bank of Baroda which was down by Rs 16.55 at Rs 649.35, Bank of India which was down by Rs 17.50 at Rs 290.50, Canara Bank which was down by Rs 12.05 at Rs 345.65.

But the biggest loser among the PSU banks was SBI which fell by Rs 71.35 to Rs 1946.05.

On the other hand, the leading private sector banks put up a mixed show. HDFC Bank and ICICI Bank were the star performers in this space. HDFC Bank gained Rs 21.20 to close at Rs 587 and ICICI Bank was up by Rs 23.70 to end the day at Rs 930.45. Yes Bank closed with a gain of Rs 9 at Rs 354.65 and IndusInd Bank was up by Rs 4.60 at Rs 327.55.

But Axis Bank was marginally down by Rs 2.35 at Rs 999.85 and Kotak Mahindra Bank lost Rs 10.70 at Rs 530.70.

The other PSU banks in the CNX PSU Bank index also showed weak sentiments. IDBI Bank lost Rs 1.35 at Rs 85.25, Syndicate Bank was down by Rs 2 at Rs 92.65, Allahabad Bank shed Rs 3.95 at Rs 128.55, Andhra Bank was in the red by Rs 4.35 at Rs 100.50, IOB lost Rs 3.45 at Rs 70.30 and Oriental Bank shed Rs 14.55 at Rs 212.05.

HDFC Bank’s closing price of Rs 587 was near its 52 week high of Rs 593.80. On the contrary, IOB shares hit a 52 week low of Rs 68.75 before recovering marginally at the close. Canara Bank came close to breaching its 52 week low of Rs 341.30 when it dipped to a low of Rs 345.65.

Published on July 27, 2012
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