In Monday's trading session, the Nifty PSU Bank index surged by nearly 5%, reaching a historic high of 5,292. During the trade, 11 out of the 12 constituents of the index registered new 52-week highs. Among these, Indian Overseas Bank emerged as the top performer, witnessing a substantial 20% surge to attain a new one-year high at ₹47.4.
In just the last four trading sessions, the stock rallied 43.50%, jumping in value from ₹35 to ₹46.40. This surge translates into a remarkable gain of 143% over the last year.
UCO Bank shares also experienced a significant rally in trade, climbing by 18.75% to establish a new 52-week high at ₹48.45. Over the last one-year period, the shares have grown from ₹12.25 apiece to ₹46.50, translating into a stellar rally of 280%.
Similarly, Punjab & Sind Bank also set a new 52-week high of ₹53.6 in Monday's trade by surging 19.93%. So far in 2023, the bank has gained 49%. Central Bank of India shares soared 19.14% to record a fresh one-year high of ₹56 apiece.
Likewise, shares of Bank of Maharashtra, Bank of India, Punjab National Bank Indian Bank, Bank of Baroda, Canara Bank and Union Bank of India all recorded new 52-week highs in Monday's trade.
SBI shares are also hovering around their 52-week high of ₹629.6. With the current trading price at ₹603.95, they are just 4% below this level.
Zooming out, the Nifty PSU Bank index rallied 61% in the last one-year period, outperforming the benchmark Nifty 50 index which delivered a return of 12.62%.
In terms of financials, PSU banks posted stellar performance by registering a net profit of ₹34,774 crore for the first quarter ended June 2023. During the April-June period of the previous fiscal, all 12 state-owned banks recorded a net profit of ₹15,306 crore, PTI reported.
The high-interest regime helped banks to earn a good net interest margin (NIM) during the quarter. Most banks had recorded NIMs of over 3%.
In Q1, three lenders logged a profit growth of over 100%, with Punjab National Bank recording the highest percentage growth of 307%, followed by SBI, which recorded a 178% bottom line growth, and the Bank of India with a 176% surge.
Several measures taken by the government have helped in the revival of PSBs. As a result of the 4R's strategy of recognition, resolution, recapitalisation, and reforms, non-performing assets of banks have come down to a 10-year low at 3.9% of total advances. At the same time, banks recovered bad loans worth over ₹8.6 lakh crore in the last eight financial years, the report said.
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