Shares of public sector banks plummeted 10-12% in the last two days following their dismal financial performances weighed down by rising sticky loans. The Reserve Bank of India has mandated banks to start the cleaning up process from this quarter itself and complete the act by FY17. Banks may need to set aside as much as Rs 70,000 crore of additional funds to cover the stressed advances over the two quarters, putting strain on profitability.
SBI announced 62% fall in net profit on account of rising sticky assets leading to a 2.99% fall in prices to Rs 154.20 on the Bombay Stock Exchange (BSE), which is less than half of its 52-week high of 315.80. Banks such as Allahabad Bank and Dena Bank reported losses in the December quarter. BSE BANKEX was down 3.81% to 15,889.
Here comes the words of caution from Pankaj Sharma, executive director and head of equities at Equirus Capital: “Don’t try to catch falling knives like what we have seen with PSU banks. We are continuously seeing that they are under pressure and people have been saying in the last month or so that they are attractive.”
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Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price