PNB & 4 PSU Banks Merger May Kill Foreign Competition

ET Now spoke with a market expert who said that four PSU banks, Oriental Bank of Commerce (Corporation Bank), Allahabad Bank, Corporation Bank, and Indian Bank will merge with PNB to create a stronger balance sheet. They will also have the bargaining power necessary to resist all foreign banks coming into India.

The ET Now journalist made a valid point during the conversation by saying that Indian Bank was the strongest of the four PSU banks. PNB, however, was stronger than PNB. If a large bank had massive amounts of NPAs, how would the restructuring of the whole consolidated entity look?

According to the market expert, he would need to calculate a lot of numbers in order to comment on the question. According to his current understanding, one must look at 4 parameters. The first was the capital structure the bank currently owns. The NPA level was second, followed by the balance sheet breakdown of the advances side. Fourth, it was important to understand how the top management would behave.

The market expert continued to comment on the capital structure of each bank. According to his current perspective, PNB was in a good position, while Indian Bank was the best of the four PSU banks that were merging. He said that PNB’s NPA situation was worse than all other banks, so the consolidated entity would be better for PNB than any other bank.

According to him, all these banks would have a better balance sheet. They would also have more bargaining power against the Indian banks that were flooding into India. The market expert said that they would also be able bring down the prices to a level where they can compete with the big banks.

Share Price:

Today, the PNB Share Price opened today at Rs.98. It is currently trading at Rs.99.30. This is up by 2.37%.

The 52-week high price of PNB Shares was Rs.180.55 (17. Aug-15), while the 52-week low price of Rs.69.25 was recorded (24. Feb-16).

PNB fundamentals:

PNB’s Average Daily Movement [ADM] is 4.05. The volume average for the past 20 days is 13466635

Resistance and Support Levels for PNB:

PNB share has a Support Level of Rs.92, and a Resistance Level of Rs.101.20.

For more information about Support and Resistance Levels for PNB, please visit PNB Stock Price History or PNB Stock Price Forecast.