Investors were ecstatic with the performance of banking stocks. Particularly, PSU banks have shown exceptional performance, driven by an increase in net interest income, an expansion in net interest margins, and a reduction in provisions.
Over the last one-year, six banking stocks have rewarded their shareholders with returns ranging from 150% to 290%, while four other banks have surged by up to 145% during the same period. Jammu & Kashmir Bank has emerged as the standout performer, boasting a staggering 289% return over the last year. During this incredible run, the bank's shares have surged from ₹29.30 apiece to an impressive ₹114 apiece. Notably, the stock witnessed an astounding surge of 114.40% between April and September.
According to its Q2FY24 business update, the bank's deposits jumped by 9.40% YoY, reaching ₹2,18,269 crore. While CASA deposits constitute a substantial portion at ₹64,067.68 crore, the CASA percentage slightly decreased to 50.61%. Gross advances expanded to ₹91,679.87 crore in Q2FY24, representing a YoY growth of 15.88%.
UCO Bank secured the second position among banking stocks with a remarkable rally of around 239% over the last year. A significant portion of these gains, 58%, was achieved in December alone, followed by a 40% rally in September.
Karnataka Bank isn't far behind. Its shares have zoomed up by 63% this year, with five out of the last nine months ending in gains, including an impressive 25% gain in June. Over the last year, the shares witnessed a remarkable gain of 184%.
Punjab & Sind Bank secured the fourth spot among the best-performing banking stocks. The shares maintained a steady upward trajectory, registering three standout months, including December, April, and September, with a gains of 62.3%, 40.35%, and 34%, respectively.
From a trading price of ₹15.55 in October last year, the shares have zoomed 175% to trade at the current value of ₹42.75 apiece, and they are up by nearly 182% from the 52-week low of ₹14.9 apiece.
Punjab & Sind Bank is aiming for 2,000 branches and as many ATMs in the country in the next three years as part of its strategy to increase touch points and brand visibility.
The bank intends to open 50 branches during the current financial year, taking the branch count to over 1,600, Punjab & Sind Bank Managing Director Swarup Kumar Saha told PTI.
South Indian Bank also made a mark with a fabulous return of nearly 160% in the last year. Impressively, the bank finished nine out of the last eleven months with gains. The bank reported a 10.32% YoY surge in gross advances to ₹74,102 crore in Q2FY24, and its total deposits rose 9.80% YoY to ₹95,499 crore.
Earlier in August, domestic brokerage firm ICICI Securities raised its target price on the stock to ₹28 apiece from 25 earlier, maintaining a 'buy' rating.
The RBI has approved the appointment of Mr P.R. Seshadri (ex-MD & CEO, Karur Vysya Bank) as MD & CEO of South Indian Bank (SIB) for a period of three years with effect from October 1, 2023, as per the bank's exchange filing. The brokerage sees the RBI approval for the appointment of Mr Seshadri as a key positive for the bank.
Bank of Maharashtra has continued its impressive run for the fourth consecutive year in 2023, with a rally of nearly 49%. Between July and September, the shares spiked from ₹28.90 apiece to ₹47.70, translating to a gain of 65%. Overall, this robust performance has seen the shares gain an impressive 150% in the last year.
Other banking stocks, including Indian Overseas Bank, Dhanlaxmi Bank, Bank of India, Punjab National Bank, and RBL Bank, have also delivered substantial gains ranging from 100% to 145% in the last year.
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