SBI, ICICI shares drop on worries over Kingfisher troubles MUMBAI (Global Markets) - Shares of India's top two lenders State Bank of India (SBI.NS) and ICICI Bank (ICBK.NS), which hold more than 5 percent in troubled Kingfisher Airlines (KING.NS), fell over 4 percent on Friday on worries their loans to the carrier could turn sour.Stock Market Predictions
Kingfisher, India's second-largest private airline, has canceled a large number of flights since Sunday in a bid to cut capacity and minimize costs, and media reports said leasing companies were planning to take planes back and pilots were leaving.
ICICI Bank shares fell as much as 5.3 percent on Wednesday to the day's low of 816.7 rupees -- its biggest fall in single day in more than a month -- while SBI fell as much as 4.3 percent.
Investors were concerned that the provisioning requirement for banks will increase, hitting profitability, if loans to Kingfisher turned bad, traders said.
A senior executive at SBI said Kingfisher was still a "standard asset," which meant there has not been any defaults yet. She declined to comment further. Other executives at the bank were not immediately available for a comment.
A source familiar with loans to Kingfisher at ICICI Bank, which has lent 4.3 billion rupees to the carrier, also said there has not been any payment default yet.
India's civil aviation minister Vayalar Ravi on Friday said he would talk to Finance Minister Pranab Mukherjee to get banks' assistance for Kingfisher.
The source at ICICI Bank said there was no proposal to provide any financial assistance to the carrier.
Kingfisher has already restructured part of its debt to forego about a quarter of its equity to a consortium of 13 banks led by SBI.
State-run IDBI Bank (IDBI.NS) holds 3.5 percent stake in Kingfisher, while Bank of India (BOI.NS), UCO Bank (UCBK.NS) and Punjab National Bank (PNBK.NS) hold more than 1 percent each, according to data on the Bombay Stock Exchange website.
Earlier this month Kingfisher said it had sought further cushion from banks to ease its debt burden but denied it was seeking another debt restructuring.
State Bank of India's shares took a beating when it announced quarterly earnings on Wednesday despite better-than-expected profits, because of its worsening asset quality.
India's dominant lenders, along with over 20 more banks, are also in talks with ailing state run carrier Air India AIN.UL to restructure $4 billion of working capital debt.
(Reporting by Swati Pandey and Abhishek Vishnoi; Editing by Rosemary Arackaparambil)
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