Tuesday, October 3, 2023
HomeNifty PSU Bank Rallies Nearly 4%; IOB, PSB, Central Bank, Uco Bank...

Nifty PSU Bank Rallies Nearly 4%; IOB, PSB, Central Bank, Uco Bank Surge Up To 19%

Last Updated: September 18, 2023, 15:21 IST

Nifty PSU Bank was the top-performing index with nearly 4% gains on NSE in an otherwise dull session on Monday, with 11 of the index constituents at fresh 52-week highs.

Shares of public sector undertaking (PSU) banks were on a roll with Indian Overseas Bank (IOB), Central Bank of India, Punjab & Sind Bank (PSB) and Uco Bank soaring up to 19 per cent on the back of heavy volumes, in an otherwise subdued market. In the past four trading days, the stock prices of these banks have zoomed between 30 per cent and 45 per cent.

Besides these four banks, Bank of India, Bank of Maharashtra, Union Bank of India, Indian Bank, and Punjab National Bank (PNB) were up in the range of 5 per cent to 8 per cent. Except State Bank of India (SBI) and Indian Bank, all other PSU banks were quoting at their respective multiyear highs.

Strong credit growth, relatively lower valuations, and commendable work on the asset quality front helped the surge in the banking index.

Axis Securities in a recent note underlined that credit growth of scheduled commercial banks (SCBs) surged 15 percent as of March 2023 from 8.6 percent a year back. The faster pace of credit offtake is attributed to the pent-up demand factor as the normalisation of economic activity gained pace.

“The RBI’s December 2022 Financial Stability Report highlighted that Indian banks are well-capitalised and are in a well-equipped position to absorb any macroeconomic shocks. Under the baseline scenario, the GNPA ratio of SCBs is likely to improve to 4.9 percent in September 2023 from 5 percent in September 2022. Even the slippage ratio which has been on the uptrend since December 2021 has cooled off in Q2FY23. PSBs have registered the most improvement during this period,” the broker said.

In the past five days, the PSU Bank index has rallied 8 per cent on expectations of improved earnings and asset quality of the state-owned banks.

Source link


Most Popular

Recent Comments

%d bloggers like this: