PSU Bank Stocks: Shares of most public sector banks fell flat on Monday, January 6. The Nifty PSU Bank index fell by nearly 3 per cent during trading. Shares of all the 12 banks included in the index were trading in the red. The main reason for this decline is believed to be the weak business updates of these banks for the December quarter. Due to these business updates, the fear of weak third quarter results of these banks also increased, due to which investors witnessed selling of these shares today.
Union Bank suffered the most loss
The biggest fall in the PSU bank index was seen in shares of Union Bank of India, which fell by 8% in trade. Among the banks that have released their December quarter business updates so far, Union Bank has had the weakest performance. The bank said that its deposit growth in the December quarter was only 3.8% on an annual basis, while advances saw a growth of 5.9%. Deposits declined by 2% on a quarterly basis, while advances recorded a growth of only 2.1%.
Bank of Baroda shares fell 4%
Talking about other banks, Bank of Baroda released its business updates last Friday, January 3. The bank said its deposit growth in the December quarter stood at 11.8% year-on-year, while advances grew by 11.6%. Despite this, the bank’s shares fell by more than 4%, making it the second biggest loser in the PSU bank index.
Performance of other PSU banks
UCO Bank saw a growth of 9.4% in deposits during the December quarter, while advances saw a growth of 16.2% year-on-year. Its shares fell more than 2.5% in trading. However, it also needs to be noted that this stock has very little free float in the market.
Bank of India has released its business updates. The bank said that its deposit amount increased by 12.3% in the December quarter as compared to the same quarter last year. There was a growth of 15.3 percent in advance amount. This stock also fell by 3.5% during trading.
Biggest fall in PSU bank index after November 2024
This is the biggest fall in the PSU Bank Index in a single day since November 13, 2024. The index fell 3.1% that day. Apart from weak quarterly updates of banks, widespread selling in the stock market was also responsible for today’s fall. Market analysts say that PSU banks will have to work on their growth strategy to show better performance. Investors are expected to get some relief from the upcoming quarterly results and budget announcements.
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