“PSU banks rallied over short-covering amid buzz of re-capitalisation” said Sudip Bandyopadhyay, managing director & CEO, Destimoney Securities. “However, tough times ahead for them as it will take few years to improve their credit profile.’’
Other than better than expected earnings, the government has also shown that it is on course to change the nature of PSU banks by appointing two private sector bankers as the chief executives at Bank of Baroda and Canara Bank.
“We have made a proposal to the RBI for the same.” But bad loans continue to be an issue. For BoB, goss bad loans at Rs 17,274 crore were 4.13% of total loans at the June quarter end.
“All corporates are not out of woods. Whether they would be NPA or not, I do not know. But hope is not written off,” said Dhawan.
“Slippages have been higher, around Rs 1,600 crore, mostly because of two major accounts which contributed around Rs 640 crore,” said Animesh Chauhan, MD & CEO of Oriental Bank of Commerce.
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