[sbinews] Bank Stock Market Capitalisation

  • From: sbistcbangalore@xxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Mon, 22 Dec 2003 20:35:29 +0500

Banks fire the floor, add Rs 56,000cr to m-cap

MUMBAI: For Indian banks, life no longer ends at lending and borrowing of 
money. They have rapidly established themselves as leaders in the wealth 
creation game. Consider this: Investor wealth in banking sector stocks has 
zoomed past Rs 1,00,000 crore, or $23bn, on the back of a sharp rally during 
the current bull run. 

From Rs 48,408 crore on January 6 ’03 — the day on which the BSE’s BANKEX was 
at its 52-week low at 1,294 — the total market cap of the 36 listed Indian 
banks —  public and private —  has shot up to Rs 1,04,911 crore on Friday, 
adding Rs 56,502 crore to investor wealth in less than a year. Since January, 
the BANKEX has doubled to end at 2,582 on Friday versus a 66% rise for the 

Public sector banks dominated the wealth creation game with 17 such banks 
contributing Rs 34,706 crore to the investor wealth. The 19 private sector 
banks added Rs  21,796 crore. 

The investor bullishness comes amidst hopes of better prospects for the Indian 
banking sector due to higher treasury income, the a recovering economy and 
higher recovery of bad debts. 

This fiscal year itself, interest rates fell by 100 basis points and there are 
signs that rates may fall further. “Many banks such as the SBI, Bank of Baroda 
and Bank of India have reduced their deposit rates which is an indication that 
the rates are headed south,” said an analyst. 

The rise has also been fuelled by the subtle pressure from finance ministry on 
public sector banks to pay interim dividend. Banks such as Bank of Baroda, 
Allahabad Bank and Syndicate Bank have already announced interim dividends. In 
absolute terms, State Bank of India (SBI) generated the highest amount of 
wealth of Rs 11,073 crore since January. 

SBI is followed by ICICI Bank with Rs 8,966 crore and HDFC Bank with Rs 4,041 

The rally in small and medium sized banks has been relatively sharp with most 
such banks recording at least 100% appreciation in market cap. 

Among second-rung banks, Bank of Baroda, Canara Bank, Oriental Bank of Commerce 
and Punjab National Bank have generated, on an average, wealth of Rs 3,200 
crore each. 

Some others such as UTI Bank, Bank of India, Indian Overseas Bank, Union Bank 
of India, Vijaya Bank, J&K Bank and Kotak Mahindra Bank have made their 
investors richer by Rs 1,000-2,000 crore each since January. 

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