Entering these banking counters at current levels could fetch returns in the form of dividend (assuming these banks maintain the dividend for the current fiscal too). State Bank of Bikaner and Jaipur (SBBJ), State Bank of Travancore (SBT), Oriental Bank of Commerce (OBC), IndusInd Bank, Bank of India (BoI) and Dena Bank could provide a dividend yield in the range of 6.7 per cent to 8.82 per cent.

Moreover, the returns (including capital appreciation) for the investors could be more considering that most of these banks are now trading at attractive price-earning multiples. Almost all the banking scrips are trading close to their 52-week lows.

For instance, BoI could provide an yield of 7 per cent at the end of fiscal 1999 if the bank gives the same-level of dividend of 20 per cent. The scrip, which is trading close to its all-time low at Rs 28, has an attractive price-earning multiple of 5.2 which also leaves scope for capital appreciation. The book value is Rs 32.6 and the stock has seen a 52-week high of Rs 65. On a high equity base of Rs 637 crore, the bank has an annualised EPS of 5.46. However, compared with Corporation Bank, State Bank of India and BoB, BoI has a high net NPA-level of 7.34 per cent.

Another attractive bet could be IndusInd Bank which may provide a future dividend yield of 7.4 per cent for fiscal 1999 (based on the dividend of 20 per cent for fiscal 1999). The bank is now trading at its 52-week low of Rs 27. On an equity base of Rs 120 crore, the annualised EPS (based on first quarter results) works out to Rs 5.14. The EPS discounts the current market price of Rs 27 (which is also its 52-week low) by a multiple of 5.25. The bank has a net NPA level of 3.96.

SBBJ could provide an yield of 8.82 per cent for fiscal 1999 (based on the dividend paid in 1998 at 30 per cent). As the scrip now is quoting close to its 52-week low of Rs 330 (bookvalue at Rs 688.24) and a price-earning multiple of only 1.37, the return (including capital gain) over a period of 10 months could be attractive. The bank has a very low equity base of Rs 50 crore and a comfortable CAR of over 10 per cent. Hence, in the near future, the need for equity dilution may not arise. However, net NPA level of the bank is slightly higher at 7.13 per cent.

SBT can also provide a dividend yield of around 7 per cent for fiscal 1999. The scrip (current market price at Rs 354) is now quoting at a p/e of 2.79 and has a bookvalue of Rs 703 as on March 31, 1998. Although the bank is comfortable in CAR (11.48 per cent) with a low equity base of Rs 50 crore, it has high level of net NPAs at 12.21 per cent. However, SBT and SBBJ are not very liquid with very poor trading volumes on the bourses.