Dena Bank put under PCA, PSBs in focus

While the earning season brought cheers to almost all sectors, the strain in the banking sector, especially in the public sector banks, is also being highlighted. Prominent public banks including PNB, Allahabad Bank, Dena Bank, Canara Bank, Vijaya Bank, OBC, UCO were buzzing in the morning session.

Dena Bank reported Q4FY18 results on Friday with a net loss of Rs. 1,225.42 crore versus Rs. 380.07 crore in Q4FY17. The bank's gross NPAs were at 22 percent with a negative RoA of 4.07 for Q4FY18.

In its latest move against worsening asset quality in state-owned banks, RBI has barred Dena Bank from fresh lending and hiring new personnel under the Prompt Corrective Action (PCA). Already 11 public sector banks are under PCA including IDBI Bank, Bank of India, Bank of Maharashtra, OBC, Allahabad Bank and UCO Bank. Banks are placed under PCA when they are unable to maintain minimum requirements of CAR, the bank's net non-performing assets (NPAs) moves above 6 per cent or its return on assets (RoA) is negative for two years.

Meanwhile over the weekend, Allahabad Bank and UCO reportedly highest quarterly loss for Q4FY18. On a quarterly basis, gross NPAs for Allahabad Bank, UCO and Canara Bank were at 14.2 per cent, 20.4 per cent and 17.8 per cent, respectively.

Among public sector banks, Dena Bank was trading at Rs . 16.95 per share, down by 8.13 per cent, PNB was at Rs. 89.65 per share, up by 1.13 per cent, Allahabad Bank was at Rs. 44.50 per share, down 2.63 per cent, Canara Bank was at Rs. 248.90 per share, up by 1.04 per cent, Vijaya Bank was at Rs. 59.55 per share, up by 0.51 per cent, OBC was at Rs. 83.30 per share, up by 0.79 per cent at around 11:30 hours on Monday.