Punjab National Bank (PNB) became the third public sector bank to achieve the Rs 1 lakh crore mark on Friday, despite the stock price has yet to reach an all-time high. This accomplishment is attributable to the large stock infusion seen in the past by banks, notably PNB.
The government has injected capital into most PSU banks to stimulate loan development and to help them weather losses from provisions for non-performing assets (NPAs). This has resulted in an increase in their share base and, as a result, a rise in market valuation.
PNB’s total outstanding shares have more than sixfold increased from FY13 to 1101 crore.
While the State Bank of India (SBI) ranks first with a market value of 5.8 lakh crore, the Bank of Baroda ranks second with a market capitalisation of 1.2 lakh crore.
For the July-September quarter of the current fiscal year, the lender recorded a 327 per cent increase in net profit to Rs 1,756 crore. The gross non-performing assets (GNPA) of the public-sector lender fell to 6.96 per cent from 10.48 per cent over this period, and the net non-performing assets (NNPA) fell to 1.47 per cent from 3.80 per cent.
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Most state-owned banks’ operating profits have increased in the last two years. “In last two years, banking system has grown at a fairly fast Pace,” said Karthik Srinivasan, Senior Vice President of ICRA.
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