MUMBAI, Mar 9: The Corporation Bank counter on the Bombay Stock Exchange (BSE) has been witnessing hectic trading activity over the past one week. The scrip, which was ruling at Rs 118 on February 23, touched an intra-day high of Rs 131.20 on Monday with the total traded volumes at 6.55 lakh shares.Says a banking analyst, "Corporation Bank scrip is fundamentally very strong. The scrip has flared up on the BSE largely on account of a very low p/e ratio." The bank's p/e ratio currently stands at 6.4, against HDFC Bank's 21.4. The bank's scrip has been witnessing huge volumes over the last few trading sessions. On March 2, the scrip saw volumes of 14.72 lakh shares on the BSE while on February 24, the volumes stood at 11.10 lakh shares -- just a day after it was moved to A category. "Even weaker banks like Global Trust Bank and ICICI Bank are quoting at higher p/e ratios than Corporation Bank," says the analyst quoted earlier. Global Trust's p/e stands at 8.6 while ICICI Bank's p/e is at 13.7. CorporationBank's low level of non-performing assets at 3.96 per cent compared to other public sector banks has also made the scrip attractive.
Market sources have said that a few domestic operators and Credit Lyonnais have been cornering shares over the past two weeks which has in turn taken up the price of the scrip. "These brokers may be warehousing the shares for a large investor," said a source.
Corporation Bank was the second bank to enter the primary market during the current fiscal in October when it raised Rs 304 crore with a fresh issue of 3.8 crore equity shares of Rs 10 each at a premium of Rs 70. The scrip was moved to the A category along with other bank stocks on February 23.
Corporation Bank recorded an interest income of Rs 486 crore during the first half of the current fiscal with a net profit of Rs 84.84 crore. The bank's deposits stood at Rs 7,749 crore while advances were at Rs 3,010 crore.
