PNB shares tank nearly 9% on $1.77 bn worth of fraudulent transactions

Reuters

Feb 15

Shares of Punjab National Bank (PNB) fell as much as 8.6 per cent to Rs 133.50, lowest since October 24. Over 45.5 million shares changed hands by 0445 GMT versus 30-day average volume of 20.55 million.

The state-run lender shares fell 10 per cent in the previous session after it reported detecting fraudulent transactions at a Mumbai branch totalling about $1.77 billion. PNB also indicated more banks could be hit by the fraud.

Morgan Stanley has cut the target price on the stock to Rs 195 from Rs 215 with rating ‘overweight’, saying revelation of fraudulent activity is a “substantial negative".

According to Morgan Stanley analysts, PNB event “creates uncertainty around outlook that bad loans have peaked. Another risk could be how banks conduct business with each other”.

Published on February 15, 2018
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