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Top 5 PSU Banks With The Least Net NPA Ratios

By Saikat Mitra | 3/22/2013 9:00 PM Friday

A look at the performance of the PSU banks on a YTD basis tells us that most of the banks have been beaten on the bourses. The main concern that has crept in after the December 2012 quarter is on the NPAs (Non Performing Assets) front. Let us know what NPAs actually mean.

According to Investopedia, NPA is defined as a debt obligation where the borrower has not paid any previously agreed upon interest and principal repayments to the designated lender for an extended period of time. The non-performing asset is therefore not yielding any income to the lender in the form of principal and interest payments.

Let us look at the top 5 PSU banks that have the least Net NPAs as of FY12.

Name of the BankNet NPA RatioM-Cap (Rs/Crore)YTD Returns (%)
Bank of Baroda  0.54 26772 -26.26
Bank of Maharashtra 0.84 2880 -21.34
Corporation Bank 0.87 5697 -19.51
Andhra Bank 0.91 5195 -23.86
Syndicate Bank 0.96 6805 -14.78
Source: IBA, BSE

Bank of Baroda: Bank of Baroda has a history of more than 100 years. Starting off in the year 1908, from a small building in Baroda, the bank has spread its wings across India and 25 other countries.

The bank works towards a vision to be a top ranking national bank of international standards, committed to augmenting stakeholders' value through concern, care and competence. At present, it operates through a network of 4134 branches, and 2288 ATMs in India, as well as through 58 branches and 97 offices in 25 countries.

If we look at its NPA as of FY12, we find that the bank has topped the charts with a Net NPA ratio of 0.54x. The bank’s market capitalisation stands at Rs 26772 crore and on a YTD basis, the stock prices had tanked by 26.26% in the current calendar year.

Bank of Maharashtra: Bank of Maharashtra is engaged in providing banking products and services in India. Currently the bank operates through its outlet of 1638 branches and 501 ATMs. It was founded in 1935 and is headquartered in Pune.

The bank was set up 77 years ago to serve the small-scale trade and industry and the commoners who were unable to avail banking facilities then. It has been keeping the common man at the centre in its policies, practices and strategies right from the beginning. It has a presence in 26 states and two union territories across India.

The market capitalisation of the bank stands at Rs 2880 crore and the net NPA ratio as of FY12 stands at 0.84x. On a YTD basis, the scrip has yielded a negative return of 21.34% in the current calendar year.

Corporation Bank: Started about 107 years ago in 1906, with an initial capital of just Rs 5000, Corporation Bank has recorded a Rs 236611 crore mark in business and even far more, with over 6164 service outlets across the nation, with a work force of more than 13000. In 1997, it became the second Public Sector Bank in the country to enter the capital market, the IPO of which was oversubscribed by 13x.

The market capitalisation of the bank stands at Rs 5697 crore and the net NPA ratio as of FY12 stands at 0.87x. On a YTD basis, the scrip has yielded a negative return of 19.51% in the current calendar year.

Andhra Bank: Andhra Bank provides various retail and corporate banking products and services to large, medium, and small customers in India. As of March 31, 2012, the company operated 1712 branches; 1056 ATMs; 15 extension counters; and 38 satellite offices. Andhra Bank was founded in 1923 and is headquartered in Hyderabad, India. The Bank was registered on November 20, 1923 and commenced business on November 28, 1923 with a paid-up capital of Rs 1 lakh and an authorised capital of Rs 10 lakh.

Its NPA as of FY12 stands at 0.91x. The market capitalisation stands at Rs 5195 crore and on a YTD basis, the stock prices had tanked by 23.86% in the current calendar year.

Syndicate Bank: Syndicate Bank was established in 1925 with an initial capital of Rs 8000. The objective was primarily to extend financial assistance to the local weavers who were crippled by a crisis in the handloom industry through mobilising small savings from the community.

The bank collected as low as two annas daily at the doorsteps of the depositors through its agents under its Pigmy Deposit Scheme started in 1928. This scheme is the bank's brand equity today and the bank collects around Rs 2 crore per day under the scheme. As of October 22, 2012, it operated approximately 2737 branches; and 1241 ATMs.

The market capitalisation of the bank stands at Rs 6805 crore and the net NPA ratio as of FY12 stands at 0.96x. On a YTD basis, the scrip has yielded a negative return of 14.78% in the current calendar year.

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