The last year has seen public sector undertakings (PSUs) outperforming the Nifty50, albeit by a small degree. But PSU valuations are still, on average, less than half of private sector peers at price-to-equity or PE 8.7x for the Nifty PSU Index versus 20.9x for the Nifty50. There are several reasons for lower valuation.
Corporation Bank is the biggest beneficiary of this round of capital infusion with Rs 9,086 crore of funding, followed by Allahabad Bank with Rs 6,896 crore.
The six banks that have joined the major league are Syndicate Bank, Indian Overseas Bank, UCO Bank, Oriental Bank of Commerce, IDBI Bank and Allahabad Bank.
Arun Jaitley addressed a post-Budget press conference.
Global brokerage CLSA has lowered its target price for IndusInd Bank from Rs 1,200 to Rs 900 while maintaining an outperform rating on the stock after the private lender disclosed a net worth hit of Rs 1,500 crore due to an accounting gap. The revised price target still implies an upside of 34 per cent from current levels.
Today, banks are being asked to discover niche strengths and focus on them
With the restructuring process in full swing, public sector banks have stepped-up monitoring to keep non-performing assets (NPAs) at desired levels.
Less than a month after five financial institutions sold 20 per cent in the National Stock Exchange, a consortium of five stakeholders led by State Bank of India are looking to sell an 11 per cent stake in the exchange.
The government also informed that it has been decided to entrust IBPS the responsibility to conduct the common recruitment examination for PSBs.
The Reserve Bank of India is formulating guidelines that would allow government-owned banks get into the private equity business.
Public sector banks may have to bear a burden of Rs 1,800-2,000 crore arising due to a recent Supreme Court judgement on the waiver of compound interest on all loan accounts which opted for moratorium during March-August 2020, sources said. The judgement covers loans above Rs 2 crore as loans below this got blanket interest on interest waiver in November last year. Compound interest support scheme for loan moratorium cost the government Rs 5,500 crore during 2020-21 and the scheme covered all borrowers including the prompt one who did not avail moratorium.
Interest rates are set to fall again with public sector banks today agreeing to lower deposit and lending rates next month.
Public banks face slowdown heat.
The capital infusion would help improve the financial health of banks. While some banks would get necessary regulatory capital while others would get it for fueling growth.
Public sector lenders led by State Bank of India said on Monday that they will look at further interest rate cuts.SBI chairman O P Bhatt told reporters after a meeting with Finance Minister Pranab Mukherjee that the bank is considering cutting its prime lending rate for the second time in as many months.
'Investing in these funds makes sense if their net yield over better-quality funds -- corporate bond funds or banking and PSU funds -- is meaningful.'
The government on Thursday approved a proposal to inject Rs 12,517 crore in public sector banks to help them enhance the lending activity and meet the capital adequacy norms.
An increase of 10% in net profit is expected as higher provisioning would negate most of the gain on account of expansion of loan portfolios.
The government is likely to infuse additional capital of Rs 20,000 crore in the public sector banks next financial year to meet Basel III global capital risk norms.
Gartner Inc, the research and advisory firm, expects mergers and acquisitions in public sector banks to gain momentum during the next couple of years, as the Indian government is "poised to increase" foreign holding in Indian banks.
Report points out corporate vulnerability indicators remain elevated.
A few state-owned banks such as IDBI Bank, Union Bank, Indian Overseas Bank have announced results for FY14.
The one-year returns for equity-oriented mutual fund (MFs) schemes have largely mirrored the gains made in the secondary market. However, schemes that invest in infrastructure (infra), small-cap, and public sector undertaking (PSU) banks have emerged standout performers, with gains in excess of 100 per cent in some cases. Of the total 484 equity schemes, 353 have managed to beat the Sensex, reveals the data provided by Value Research. Around 20 have delivered returns in excess of 90 per cent and six schemes have given returns of over 100 per cent in the past one year. The S&P BSE Sensex Total Return Index (TRI) has given returns of 51 per cent in the last one year, ended October 29.
The RBI on Friday imposed a fine of Rs 6.5 crore (Rs 65 million) on six public sector banks including IDBI Bank, Dena Bank and Indian Bank, for violation of customer identification or KYC norms and anti-money laundering guidelines.
The All India Bank Employees Association, Bank Employees Federation of India, All India Bank Officers' Association and National Union of Bank Employees have given a call for one day country-wide strike.
The government may infuse about Rs 10,000 crore (Rs 100 billion) as equity capital in nationalised banks in addition to an identical amount in the country's largest lender, State Bank of India (SBI). Nationalised banks with the government holding closer to the floor of 51 per cent are likely to receive the capital infusion support.
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State oil refiners, who are the biggest buyers of US dollars, agreed to implement the RBI order with immediate effect, sources with direct knowledge of the development said.
The government on Friday approved a capital infusion of Rs 15,000 crore (Rs 150 billion) in public sector banks (PSBs) in the current fiscal, a move that will increase the lending capacity of the banks by Rs 1.85 lakh crore.
Goldman Sachs is bullish about Indian aerospace and defence, preferring private companies over public sector units (PSUs) as the country ramps up its export target for the sector to Rs 50,000 crore by FY29 from Rs 23,600 crore last year. The American investment bank's top 'buy' recommendations include Solar Industries, Bharat Electronics, Data Patterns and PTC Industries, while Bharat Dynamics is rated 'sell'.
A peek into the life of a public-sector banker who did well professionally, but paid a price for it, points out Tamal Bandyopadhyay.
Ask rediffGURU Naveenn Kummar your insurance mutual fund and personal finance-related questions.
ICICI Bank was the biggest loser in the Sensex pack, slipping 2.81 per cent, followed by Mahindra & Mahindra, State Bank of India, UltraTech Cement, IndusInd Bank, Kotak Mahindra Bank, Tata Motors, Bajaj Finserv, Axis Bank and Power Grid. Tech Mahindra, Bharti Airtel, Infosys, Asian Paints, Hindustan Unilever, Larsen & Toubro and Titan were the gainers.
In a series of tweets reacting to banks led by State Bank of India taking over management control of troubled Jet Airways, Mallya said, "...Only wish the same was done for Kingfisher".
The government can issue recapitalisation bonds, or the RBI's huge reserves of over $127 can also be dipped into to help the state-owned bank's recapitalisation needs.
Reserve Bank Governor D Subbarao on Tuesday favoured bifurcation of the posts of chairman and managing director in state-run banks, saying the experience of such a split in the private sector has been satisfactory.
Non-performing assets of banks have increased from Rs 2.75 lakh crore in March 2015 to Rs 7.33 lakh crore as on June 2017.
Punjab National Bank has the largest share.
