Andhra Bank and Union Bank of India figured as the biggest losers among banking stocks after the two scrips became ex-dividend.

By 10:35 IST, Andhra Bank (ABL) slumped 5.62% to Rs 33.60 and Union Bank (UBI) lost 4.01% to Rs 37.10, in fact. Substantial volumes were registered on both counters - over 1.74 lakh shares for ABL and more than 3.4 lakh shares for UBI.

ABL had declared a final dividend of 24% or Rs 2.40 per Rs 10 share for the year ended 31 March 2002. UBI announced a 21% or Rs 2.10 per Rs 10 share for the year ended 31 March 2003.

The two companies had turned out spectacular performances vis-a-vis their  latest results. For the full year ended 31 March 2003, ABL recorded a surge in net profit of 99% to Rs 402.99 crore (Rs 202.27 crore) on a 54% rise in total income to Rs 1,356.61 crore (Rs 879.37 crore).

For FY 2002-03, UBI registered a 76% increase in net profit to Rs 552.69 crore (Rs 314.13 crore) on a 26% rise in net total income of Rs 2,322.23 crore (Rs 1,835.79 crore).

Banking sector stocks have become very much the favourites of institutions following the enactment of the Securitisation Act. The Act allows banks to seize defaulters' assets and hasten recovery of loans without additional court procedures. It also paves the way for setting up of asset reconstruction companies by banks. PSU banking stocks are considered to be one of the best picks following the bank's strong fundamentals.

Over the last eight months, between 9 October and 5 June 2003, ABL and UBI have risen 162% and 158%, respectively.

Meanwhile, as on 31 March 2003, the GoI holding in Andhra Bank and Union Bank was at 62.5% and 60.85%, respectively.