Bank stocks fell on Tuesday after HDFC Bank cut its base rate by 35 basis points to 9.35 per cent with effect from September 1. According to analysts, after this cut most banks base rates are 35-65 bps higher than HDFC Bank and they will have to take some hit on net interest margins (NIMs) if they match it.
The BSE Bankex declined 3.63 per cent at 18,923 on Tuesday. Stocks of Punjab National Bank dropped after Fitch downgrades viability rating by one notch to ‘bb’.
All the banking stocks in the benchmark index closed in red. Punjab National Bank slid the most —6.94 per cent to Rs 134.80, it was followed by Bank of Baroda (down 6.53 per cent at Rs 172.60), Kotak Mahindra Bank (down 5.71 per cent at Rs 613.80), Axis Bank (down 5.24 per cent at Rs 480.15) and Yes Bank (down 3.35 per cent at Rs 666.40).
HDFC Bank and ICICI Bank plunged 2.68 per cent and 2.32 per cent at Rs 1000.60 and Rs 271.65, respectively.
IDBI Bank, fell 5.94 per cent, is also vulnerable to a downgrade given deterioration in the stressed asset ratio, Fitch adds.
(With inputs from Reuters)