The crisis of confidence in banking stocks, after the Global Trust Bank crisis on July 26, has knocked off a good 6.18 per cent from the market capitalisation of 31 bank stocks.
These 31 banks, making up 81 per cent of the total sample of 38 listed banks, reported value erosion ranging between 1.11 per cent and 19 per cent since July 26. The GTB scrip has lost 78 per cent in value since the day the bank was placed under a moratorium.
The Global Trust Bank Crisis: Complete Coverage
The market value of these 31 banks eroded by a whopping Rs 5,478 crore {(Rs 54.78 billion) 6.18 per cent}, from Rs 88,721 crore (Rs 887.21 billion) on July 26 to Rs 83,243 crore (Rs 832.43 billion) on August 5. In comparison, the Bombay Stock Exchange's Bankex has gained 1.09 per cent, and the benchmark Sensex has gained 2.63 per cent over the same period.
The Bankex could manage to stay afloat because the remaining seven bank stocks posted positive returns of 4.85 per cent in the aggregate, reflecting a Rs 1,247 crore (Rs 12.47 billion) gain in market capitalisation. Thus the market capitalisation of the full sample of 38 banks declined by Rs 4,231 crore {Rs 42.3 billion) 3.70 per cent}.
Of the 19 listed private sector banks, 15 ended the period with losses. These 15 banks lost Rs 828 crore (Rs 8.28 billion) in market capitalisation while the other four banks gained Rs 1,186 crore (Rs 11.86 billion) in capitalisation, resulting a net increase of Rs 358 crore (Rs 3.58 billion).
Among private sector banks, Centurion Bank's capitalisation dropped 19 per cent, followed by Dhanalakshmi Bank (14.3 per cent), United Western Bank (14.per cent) and ING Vysya Bank (11 per cent).
The private banks that posted positive returns were IDBI Bank (up 11.4 per cent), ICICI Bank (5.3 per cent), J&K Bank (3.5 per cent) and Kotak Mahindra Bank (1.7 per cent).
Among the 19 listed public sector banks, 16 reported a drop in prices. Among them, Oriental Bank of Commerce, which came to the rescue of GTB, emerged as the largest loser with a 12 per cent drop in market price. OBC was followed by the Bank of Baroda (10.4 per cent drop), Dena Bank (10 per cent), Punjab National Bank (6.9 per cent) and State Bank of India (6.8 per cent).
Gainers among public sector banks include the three associate banks of State Bank of India, namely the State Bank of Bikaner & Jaipur (up 3.6 per cent), State Bank of Travancore (up 2.6 per cent) and State Bank of Mysore (up 0.24 per cent).
More from rediff