Shares of public sector lenders were under pressure in trades on Tuesday after the state run bankers decided to increase the wages of their employees by 15 per cent.
The bank employee unions had been demanding revision in wages since a long time and in a latest move had they called upon a four-day nation-wide strike starting February 25 which they called off after the Indian Banks' Association agreed on 15 per cent wage hike.
The revision in wages would be effective retrospectively from November 2012. Big PSU lenders like Punjab National Bank, State Bank of India and Bank of Baroda will not be much impacted by the move as they had been making adhoc provisions since November 2012.
However, other banks like Bank of India, Union Bank and Canara Bank are likely to take a hit of this move and their profit before tax may shrink by upto 6 per cent each, analysts said.
The shares of the PSU banking sector reacted negatively to this news and slipped in trades today. Bank of Baroda, Indian Bank, Bank of India, State Bank of Bikaner and Jaipur and Syndicate Bank were the worst hit and fell around 1-2 per cent each. The banking sub index, Bank Nifty was the top sectoral loser. The index was down 0.6 per cent underperforming the Nifty which was up 0.2 per cent.