2022 in Review: All PSU banks gain in 2022; 7 surge between 70-161%. Let's take a look

Pranati Deva
Updated: 19 Dec 2022, 02:30 PM IST
TL;DR.

Nifty PSU Bank is the best-performing index among all NSE indices in 2022. The index has surged 70 percent during the year as against a 22 percent rise in Nifty Bank and a 5.6 percent gain in benchmark Nifty. The PSU Bank index has also hit new highs earlier this month and has surged 7.5 percent in December so far and 15 percent each in November and October on the back of strong earnings for the July-September quarter (Q2FY23). The public sector banks have posted strong earnings in Q2 due to the acceleration in credit growth, improvement in asset quality, rise in loan growth, and decrease in provisions. All stocks in the Nifty PSU Bank index are also positive for the year. Of the 13 stocks in this index, 4 have given multibagger returns in 2022 while 3 have advanced over 70 percent. Let's take a look:

UCO Bank: This PSU lender is the top performer among public banks in 2022. The stock has surged 161 percent in 2022 and 116 percent in the last 1 month. The stock has rallied 70 percent in December so far after a 50 percent and 11 percent jump in November and October, respectively. The lender reported a more than two-fold rise in Q2 profit at ₹505 crore against ₹204.4 crore in the corresponding quarter of the previous fiscal. Provisions fell over 50% to ₹406 crore in Q2 against ₹1,019 crore in the comparable quarter. The bank also recorded a fall in fresh slippages. In the September quarter, ₹578 crore worth loans turned NPAs as compared to the ₹1500 crore quarterly average seen last fiscal.

Punjab and Sind Bank: This PSU bank has jumped 139 percent in 2022, making it the second-highest performer of the year. It has risen 104 percent in the last 1 month. The stock surged 85 percent in December following a 26 percent jump in November. The sharp rally is on the back of multiple positives including its aggressive expansion plans, aim to reach a  CASA ratio of 35 percent by March and expectations of ₹1,100 crore in profits this year on the back of bad loans resolutions. For the September quarter, the public sector lender posted a 27.52 percent YoY jump in its standalone net profit to ₹278 crore as against a net profit of ₹218 crore during the same quarter of the previous fiscal. 

Bank of Baroda: BoB has advanced 121 percent in 2022 YTD, becoming the third-best-performing PSU of 2022. It has gained 11 percent in the last 1 month. The stock has given positive returns in the last 6 months, up 87 percent between July-December. The lender reported a jump of 59 percent in its net profit to ₹3,313 crore for the second quarter ended September on the back of a decline in bad loans and a  rise in interest income. The lender had posted a net profit of ₹2,088 crore in the corresponding quarter of the previous fiscal. Its NII grew by 34.5 percent to ₹10,714 crore. The lender also improved its asset quality, with the gross non-performing assets (NPAs) coming down to 5.31 percent of the gross advances by the end of September 2022, from 8.11 percent in the year-ago period. 

Indian Bank: This public sector lender has also given multibagger returns in 2022, up 107 percent till date. The stock has given positive returns in the last 6 months, up 93 percent between July-December. The lender reported a  13 percent rise in net profit at ₹1,225 crore for the  September quarter of  2022-23 as provisions for bad loans fell. The bank had posted a net profit of ₹1,089 crore for the year-ago period. NII during the quarter was higher by 15 percent at ₹4,684 crore. Net NPAs or bad loans also came down to 1.50 percent ( ₹6,174 crore) from 3.26 percent ( ₹11,749 crore). 

Union Bank of India: This stock has advanced 95 percent in 2022 and 15 percent in the last 1 month. The stock has given positive returns in the last 6 months, up 146 percent between July-December. The lender's net profit increased 21% to ₹1,848 crore in the quarter ended September 2022 from ₹1,526 crore a year ago, riding on strong loan growth despite a fall in other income. Its NII grew 22 percent to ₹8,305 crore. CEO A Manimekhalai said the bank continues to maintain a conservative 10 percent to 12 percent credit growth target for the current fiscal year despite the strong growth in the second quarter. 

Bank of India: This public sector lender has risen 72 percent in 2022 YTD and 18 percent in the last 1 month. The stock has been in the green for 3 straight months since October, rising 84 percent in this period. The lender's net profit fell 9% year-on-year as the lender surprisingly increased provisions despite a fall in non-performing assets (NPAs). Net profit fell to ₹960 crore in the quarter ending September from ₹1,051 crore a year ago. 

Bank of Maharashtra: This PSU bank stock has gained 71 percent in 2022 and 31 percent in the last 1 month. The lender has given double-digit positive returns for 3 straight months since October, up 85 percent in this time. Its net profit rose 103 percent to ₹535 crore in the quarter ended September (Q2FY23), on the back of an improvement in its net interest margin (NIM). The Pune-based public sector lender had posted a net profit of ₹264 crore in (Q2FY22). BoM's NII was up 25.84 percent YoY in Q2FY23 to ₹1,887 crore. Its NIM improved to 3.55 percent in Q2FY23 from 3.27 percent in Q2FY22. Its asset quality profile improved with gross non-performing assets (GNPAs) at 3.4 percent till September 2022, compared with 5.56 percent a year ago. 

First Published: 19 Dec 2022, 02:30 PM IST