PSU Banks Extend Rally On Consolidation Buzz; PNB, Canara Bank Among Top Gainers

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Posted by AI on 2025-09-11 11:07:51 | Last Updated by AI on 2025-09-11 13:03:27

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Shares of public sector banks (PSBs) rose on September 11, lifting the Nifty PSU Bank index into positive territory in afternoon trade.

The index rose over 1 percent with PNB (Punjab National Bank) and Canara Bank emerging as the top gainers.

Led by Bank of India, which surged 6 percent, the bank stocks have been in the spotlight over the past few days amid speculation of further consolidation in the sector.

The rally came after a report suggested that the government may consolidate several state-owned banks to trim the total number of PSBs to 12 from the current 19.

Investors have been keeping a close watch on the space amid speculation of further consolidation and growing optimism that the government will provide more support to ailing banks.

On a positive note, the recent quarterly results of PSBs, excluding SBI, were largely better than expected, suggesting that the worst of the non-performing asset (NPA) pain may be over.

That said, the sector continues to be plagued by elevated NPAs, with bad loans of PSBs expected to rise by around 8,000 crore in Q1FY22, according to a report by JM Financial.

At 2:06 p.m., the Nifty PSU Bank index was up 1.06 percent at 3,246.45, outperforming the Nifty 50 index, which was up 0.61 percent.

Shares of PNB rose 3.38 percent to 37.35, while those of Canara Bank surged 5.34 percent to 27.35.

Bank of India rose 5.19 percent to 41.80, Bank of Maharashtra gained 4.53 percent to 17.20, and Union Bank of India climbed 3.77 percent to 31.90.

Meanwhile, India's largest lender, State Bank of India (SBI), was marginally up 0.51 percent at 499.15.

The recent uptick in PSB stocks comes on the back of a disappointing performance by these banks in the past several years.

Broader fiscal reforms, better management, and a stronger economic recovery will likely help these banks to report better earnings going ahead, aiding their stock prices, according to analysts.

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