Mega PSU bank merger report: Bank of Baroda falls 4%, IDBI Bank down 2%; Central Bank, Oriental Bank flat

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Updated: June 4, 2018 12:45:57 PM

After most of the NPA-laden PSU banks posted record high losses for the fourth-quarter of the financial year 2017-2018, the government is planning to merge four state-owned banks, namely India's third-largest PSU bank by assets Bank of Baroda, Central Bank of India, IDBI Bank and Oriental Bank of Commerce.

Bank of Baroda share price tumbled 4.48% to a day’s bottom of Rs 131.25 on Monday on BSE. (Image: Reuters)

After most of the NPA-laden PSU banks posted record high losses for the fourth-quarter of the financial year 2017-2018, the government is planning to merge four state-owned banks, namely India’s third-largest PSU bank by assets Bank of Baroda, Central Bank of India, IDBI Bank and Oriental Bank of Commerce. According to a news report by Mint, the government is mulling to merge the aforementioned PSBs (public sector banks). Following the merger buzz, shares of Bank of Baroda were the worst hit followed by the stock of IDBI Bank.

Bank of Baroda share price tumbled 4.48% to a day’s bottom of Rs 131.25 while IDBI Bank share price shed 2.27% to a day’s low of Rs 62.45 on BSE on Monday. Shares of Oriental Bank of Commerce fell 1.4% to Rs 77.25 whereas the stock of Central Bank of India traded little changed in green after hitting a day’s low of Rs 72.9, down by 0.14%. The stocks of Central Bank of India, IDBI Bank and Oriental Bank of Commerce also hit their respective day’s highs of Rs 74, Rs 64.45 and Rs 79.95, respectively.

Shares of Bank of Baroda emerged as one of the most traded stocks among the top 10 trades on National Stock Exchange on Monday. Up until 12:27 pm, more than 1.46 crore equity shares were traded on both NSE and BSE with about 1.36 crore equity shares being exchanged on NSE alone.

Out of these four banks, the Vadodara-headquartered Bank of Baroda is the biggest lender in terms of asset base and market capitalisation. While, on the other hand, Bank of Baroda reported lowest losses for the financial year ended 31 March 2018 and has the lowest gross NPAs (non-performing assets) in relative terms.

Here is a brief comparison of Bank of Baroda vs Central Bank of India vs IDBI Bank vs Oriental Bank of Commerce.

Parameter (FY18)Bank of BarodaCentral BankIDBI BankOriental Bank
Net loss (Rs crore)1887.15139.68157.115871.74
Gross NPAs (Rs crore)56480.3938130.755588.2626133.64
Gross NPAs (%)12.2621.4827.9517.63

Source: Exchange filings

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