The Nifty PSU Bank index concluded CY24 with a gain of 14.48%. However, the returns could have been even higher if the stocks had not witnessed a dip during the second half of the year due to concerns over a slowdown in government capex spending. In the first half of the year, the index gained 29%, but it tumbled 11.20% in the second half.
Among the top performers, SBI led with an increase of 23%, followed by Indian Bank with a return of 24%. Other notable performers ended the calendar year with gains ranging between 10% and 20%.
However, there has been a sharp selloff in PSU Banks from a few weeks. Their growth is slowing down, and quarterly updates have not been encouraging till now. Union Bank of India is the top loser on the PSU Bank index, declining as much as 8% after reporting its December quarter business update, which was the lowest among all lenders who have reported updates so far for the December quarter. Deposits were down 2% QoQ, while advances grew by 2.1% QoQ.
The other PSU Bank that reported business updates is Bank of Baroda, where deposits grew by 11.8% from last year, while advances grew by a similar quantum at 11.6%. Shares of Bank of Baroda are the second-worst performers on the PSU Bank index, trading with losses of over 4%.
UCO Bank saw deposits grow by 9.4% during the December quarter, while advances increased by 16.2% on a YoY basis. The stock is down over 2.5% but has very little free float in the market.
Bank of India also shared its business updates, where deposits increased by 12.3% from the year-ago quarter, while advances increased by 15.3%. That stock is also down 3.5%.
The PSU Bank index is witnessing its biggest single day drop since November 13 last year, during which it had declined 3.1%.
