Shares of India's second-largest PSU bank by market capitalisation Bank of Baroda gained over 9% on Tuesday as MD said that the Vadodara-based public sector bank lender has 'no exposure to Nirav Modi companies'.
Shares of India’s second-largest PSU bank by market capitalisation Bank of Baroda gained over 9% on Tuesday as MD & CEO said that the Vadodara-based PSB (public sector bank) lender has ‘no exposure to Nirav Modi companies’. Bank of Baroda expects front-ending of NPAs (non-performing assets) via new rule by the Reserve Bank of India and further expects that the asset quality will largely remain under a sustainable level, Mr PS Jayakumar, MD & CEO, Bank of Baroda said to CNBC TV18. Bank of Baroda has Rs 9,000 crore of SDR and S4A and expects 12-15% RoE (Return on Equity)on enhanced capital in the financial year 2019, PS Jayakumar said. Following the announcements by Bank of Baroda’s MD and CEO, the share price of Bank of Baroda surged heavily in the morning deals on Tuesday.
The stock of Bank of Baroda jumped 9.23% to a day’s high of Rs 144.3 on NSE on Tuesday. Due to a sharp spike in the share prices of Bank of Baroda, about Rs 2,776.51 crore has been added to the market capitalisation of the bank. Bank of Baroda held a market capitalisation of around Rs 33,249 crore as against Rs 30,472.52 crore (according to Monday’s closing price of Rs 132.25 on BSE).
A market-wide rally was seen in shares of almost all the PSU banks with stocks of Bank of India, Union Bank of India, Oriental Bank of Commerce, Allahabad Bank, Canara Bank, Syndicate Bank and Andhra Bank rising 7-14%. The stock of Bank of India was the lead gainers among the Nifty PSU Bank index after the PSU lender recovered about Rs 7,000 crore worth of Standby Letters of Credit from other banks.
Other PSU bank shares which also surged in Tuesday’s session include IDBI Bank (up 6.4%), Indian Bank (up 6.33%), Punjab National Bank (up 5.92%) and State Bank of India (up 2.93%).
For over a month now, all the PSU banks shares were gripped on the high-end pessimism amid the investors spread all across after India’s second largest PSU bank by assets Punjab National Bank informed about the “fraudulent and unauthorised transactions” totalling Rs 11,400 crore which was later got extended by Rs 1,323 crore to Rs 12,700 crore (approximately). The Rs 12,700 crore has been touted as the nation’s biggest banking scandal so far in which the prime accused diamond merchant Nirav Modi and his uncle Mehul Choksi were allegedly involved in obtaining buyer’s credit from several domestic banks outside India on the basis of fake and unauthorised LoU (Letters of Undertaking) issued by Punjab National Bank.