Comments
Bank stocks today witnessed a selling pressure after the Financial Stability Report said that asset quality deterioration is likely to continue for a few more quarters.
Shares of Kotak Mahindra Bank fell by 1.56 per cent, PNB was down 1.56 per cent, ICICI Bank lost 1.35 per cent on the BSE.
Among others, Federal Bank slipped 1.31 per cent, Yes Bank (0.93 per cent), AXIS Bank (0.79 per cent), Bank of Baroda (0.34 per cent) and HDFC Bank (0.23 per cent).
The BSE banking index fell by 0.74 per cent to settle at 21,058.76.
“RBI’s stress test results poured water on the banking sector which had been buoyant following capital infusion plans,” said Anand James, Co Head Technical Research Desk, Geojit BNP Paribas.
Strong macroeconomic fundamentals offer India a “reasonable degree of resilience” to fight uncertainties, but poor asset quality of banks and managing expectations are key challenges for regulators and the government, says the Financial Stability Report.
Gross non-performing assets (NPAs) in the banking system have grown to 4.6 per cent at the end of March this year from 4.5 per cent in September 2014, while the stressed advances including standard restructured loans have risen to 11.1 per cent from 10.7 per cent, the six-monthly FSR released by the Reserve Bank said yesterday.
Stating that the rising NPA situation has not bottomed out, the report warned that asset quality deterioration is likely to continue for a few more quarters.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.