Nifty Bank trims losses, ends 308 pts lower; Axis Bank slips 2%, HDFC Bank down over 1.5%

Nifty Bank tumbles, May 31, 2023: Days after hitting fresh peaks, the Nifty Bank index tanked nearly 600 points, or 1.3 per cent, in the afternoon session on May 31, Wednesday. However, the index trimmed its losses later and ended at 44,128.15, down 308.20 points, or 0.69 per cent. Of the 12 components of the index, six ended in red and the rest in green. Axis Bank was the biggest loser (down over 2 per cent) HDFC Bank and IndusInd Bank. On the other hand, Kotak Mahindra (up nearly 2 per cent) ended as the biggest gainer, followed by Bank of Baroda and PNB.

ALSO READ | Bank stocks will continue to outperform in FY24; HDFC Bank, BoB, Bank of Maharashtra top picks: Analysts

HDFC Bank shares ended over 1.5 per cent lower at Rs 1,611.20 on the NSE. The HDFC-HDFC merger will be completed in the next 4 weeks. HDFC Bank recently held its Analyst Meet, wherein the private sector lender highlighted how the different segments of the bank have performed with respect to growth, asset quality, and return ratios in the last three years and how the bank was getting future-ready by focusing on strengthening its digital capabilities and sustainable growth. Despite the aggressive investment plans and merger, the management, as per the brokerages who attended the meeting, has exuded confidence that it will maintain the return on average assets (RoAAs) in the range of 1.9–2.1 per cent from the first day of the merger. READ MORE 

In separate news, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Monday, May 29, that the central bank has noticed gaps in the governance of some banks, even though it has issued guidelines for the same. "It is necessary that boards and management do not allow such gaps to creep in," Das said at a conference of bank directors organised by the RBI in Mumbai. The event was organised for private sector lenders by the apex bank.

"While these gaps have been mitigated, it is necessary that boards and management do not allow such gaps to creep in," Das said in his speech. The RBI governor further said that it is the joint responsibility of the chairmen of the bank's board and the directors to ensure robust governance, IANS reported. The governor added that it was important that the directors keep themselves updated with the bank`s internal environment as well as the external factors that impact their functioning.