Reflective of pessimism over future earnings, shares of most public sector banks (PSBs) were quoting close to their 52-week lows, notwithstanding the steady stream of good news emanating from these PSBs over the last few days.
Bank of Baroda investors were the worst hit, when its share price breached the 52-week low figure of Rs 610 on September 6, 2012 to close at Rs 609.55, but bounced back to Rs 628 a day later, while Indian Overseas Bank share price at Rs 66.20 almost touched its 52-week low of Rs 66 on September 6 and closed at Rs 67.20 on September 7.
The shares of Allahabad Bank, Bank of India, Central Bank of India, Canara Bank, Corporation Bank , Indian Bank, Punjab National Bank, Punjab & Sind Bank, Vijaya Bank Union Bank of India and United Bank of India were close to their 52-year lows by less than 15 per cent, despite the spectacular rally on Friday.
Private bank investors
Investors of private banks, especially new ones like HDFC Bank, ICICI Bank and Yes Bank were relatively better off, with the prices hovering 35 to 40 per cent above their 52-week lows.
The sectoral index, BSE Bankex at 11,351.88 on September 6 was down 0.61 per cent compared to 11,283.03 on September 7, 2011, a clear indication that investments in shares of PSBs have delivered dismal returns. The Bankex was higher at 12,141.66 on August 7, 2012, implying that the slide has occurred after the declaration of Q1, FY2013 results.
A review of the Q1 results by brokerage firm Angel Broking showed that most of the PSBs posted modest growth on key parameters like net interest income (NII), profit before tax (PBT) and profit after tax (PAT) compared to the figures for the corresponding period last year.
While large PSBs excluding the SBI reported a growth of 14.5 per cent, the growth in PBT and PAT stood at 9.8 per cent and 19.3 per cent respectively. In case of mid-PSBs like Central Bank of India, Indian Bank and Allahabad Bank, NII growth was 13.3 per cent, while PBT and PAT went up 11 and 16.6 per cent respectively.
The figures for both old and new private banks were better when compared to PSBs. For new private banks, NII growth was 27 per cent, PBT 31 per cent and PAT 29.6 per cent. In case of old private banks, NII went up 21.9 per cent, while PBT and PAT growth was 41.2 per cent and 33.3 per cent respectively. The Bankex closed at 11,611.55 on September 7, 2012.
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