Prefer Corporation Bank over UCO Bank: Sharmila Joshi

Sharmila Joshi, Head of Equity of Peerless Securities advised selling UCO Bank, and buying Corporation Bank or Syndicate Bank.

Joshi told CNBC-TV18, “I think the investor can hold on to UCO Bank, but in light of the fact that the current market price is higher than the price that he bought at, maybe the investor can exit it because he can still exit without a loss.”

She further said, “Maybe he should reinvest it in another PSU bank where the results have been better - Corporation Bank, the numbers were better, a Syndicate Bank where we had a good set of numbers, Bank of Maharashtra or any of the private banking stocks for that matter. Their numbers have been good because there is safety at this point in time, at least within the PSU banking space to be in stocks where you have seen an improvement in non performing assets (NPA) levels etc. Because it would mean that when interest rates starts coming down significantly it would also mean that these banks are in a better position to go up more largely because they have dealt with their problems better. From that perspective the investor can switch out of UCO Bank.”

“Even if the investor holds on to it I don’t think it will be too much of a problem. The bad numbers are because they have provisions far higher. So it will be slow to recover. Since the investor is making money why not switch, buy a Corporation Bank or a Syndicate Bank instead,” Joshi added.