Shares of Bank of Baroda slumped the most in nine months since November after the public sector lender reported a quarterly loss with a surprising increase in its bad loans from the previous quarter.
While the Sensex closed at 25,653 points, up 163.6 points, and the Nifty ended at 7,860 points, up 45.8 points, on Monday, the public sector banks (PSBs) slipped between 3% and 8% on the bourses after a few of them, including Bank of Baroda and Allahabad Bank, reported a considerable increase in non-performing assets (NPAs) and provisioning from their previous quarter.
Five of the PSBs, including Bank of Baroda, UCO Bank, Central Bank of India, Allahabad Bank and Dena Bank, on Friday reported a collective net loss of more than Rs 6,700 crore for the quarter ended March 2016 due to multi-fold rise in provisions.
Shares of Bank of Baroda slumped the most in nine months since November after the public sector lender reported a quarterly loss with a surprising increase in its bad loans from the previous quarter. The second largest state-run bank’s shares ended 8.2% lower at Rs 142.20 at the end of the day’s trade. Jefferies India cut down its recommendations on the stock after the public lender announced that its bad-debt provisions had increased thrice in the March quarter. NPAs of the bank amounted to Rs 4,052 crore at the end of the quarter ended in March against Rs 3,893 crore in the December quarter.
Shares of the largest state-owned lender, State Bank of India (SBI), also slipped nearly 4.2% in line with the other PSB scrips. The stock ended at Rs 177.2 apiece. SBI’s results are expected to be announced next week. Punjab National Bank and Allahabad Bank lost more than 3% each while Union Bank lost nearly 6% and closed at Rs 109.10 apiece.
According to a report by the central government, gross non-performing assets (GNPAs) of banks could soar nearly 7% by March 2017 in a severe stress scenario.