The Nifty PSU Bank index tumbled in afternoon trade on July 18 as investors took money off the table after a two-session rising streak. At 1:45 pm, the index was trading over 1 percent lower at 4,435.25. The Nifty PSU Bank index had spurted 2.25 percent in the previous session, and nearly 1 percent on July 14.
Barring Indian Bank and Union Bank of India, all constituents were trading in the red on July 18. SBI was trading 1.11 percent down at Rs 594.40, Bank of Maharashtra dropped 1.88 percent, and Bank of Baroda shed 1.56 percent at 2 pm.
The Nifty PSU Bank index has gained 8.70 percent over the past month. The 1-year return stands at a hefty 67 percent.
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What analysts are saying
Analysts expect the banking sector to post strong results for Q1 FY24 amid healthy credit offtake momentum, stable margins, strong treasury operations, and relatively muted credit costs.
PSU banks have seen an improvement in their asset quality, net interest margins, and return ratios in recent times. PSU bank mergers have also strengthened their balance sheet and credit growth.
Public sector lender Central Bank of India on July 17 reported a net profit of Rs 418.4 crore for the April-June 2023 quarter, a jump from Rs 235 crore in the corresponding period last year.
The bank's gross non-performing asset (GNPA) also improved to 4.95 percent from 8.44 percent last year. The lender's net NPA stood at 1.75 percent, improving from 1.77 percent in the corresponding quarter last year. This is the on back of improvements in asset quality and increase in net interest margins of the bank.
The gross NPA of the bank in absolute terms fell to Rs 10,891 crore by end of June quarter, as against Rs 29,002 crore in the same quarter last year.
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