State-run banks in India demonstrated strong credit growth in the second quarter of the current financial year, leading to a notable rise in their stock performance. The NIFTY PSU Bank index surged as much as 2.2%, reaching an intraday high of 8,117, driven by gains in Canara Bank, Bank of India, Bank of Baroda, and Punjab National Bank.
- Bank of Baroda's global advances increased 18.27% year-on-year to ₹15.12 lakh crore.
- Canara Bank's global business grew 16% annually to ₹30.70 lakh crore.
- Bank of India's retail loan portfolio rose 19% to ₹4.12 lakh crore.
- PSU banks' aggregate domestic credit growth was about 16% year-on-year.
- Domestic deposits for these banks also showed strong growth.
How did Bank of Baroda perform in Q2?
Bank of Baroda reported significant growth in its financial metrics during the second quarter. Its global advances rose by 18.27% year-on-year to ₹15.12 lakh crore. Deposits also increased by 17%, reaching ₹17.51 lakh crore. The bank's domestic advances grew 13.51% to ₹11.87 lakh crore. Notably, retail advances, which include personal loans and credit cards, climbed 19% to ₹3.24 lakh crore.
What growth did Canara Bank report?
Canara Bank showed a 16% annual increase in its global business, reaching ₹30.70 lakh crore by the end of the September quarter. Its domestic loan book advanced 16.83% to ₹12.63 lakh crore, while the global loan book rose 19.35% to ₹13.73 lakh crore. The bank's portfolio of domestic retail, agriculture, and MSME loans increased by 21% to ₹8.12 lakh crore.
How did Bank of India’s loan portfolio change?
Bank of India’s retail loan portfolio grew 19% to ₹4.12 lakh crore in the September quarter. Its total domestic loan book increased 17.7% to ₹7.03 lakh crore. The bank’s total business jumped 21.07% to ₹18.91 lakh crore from ₹15.62 lakh crore a year earlier. Gross domestic deposits rose 23.3% to ₹9 lakh crore, indicating strong deposit growth.
What is the overall credit growth trend among PSU banks?
According to global investment bank Goldman Sachs, aggregate PSU domestic credit growth stood at about 16% year-on-year, up from 15% in the previous quarter. System credit growth accelerated by about 200 basis points to 18% as of September 15. PSU domestic deposit growth also increased to about 13% year-on-year from approximately 10% previously.
Are PSU banks maintaining their market share?
PSU banks continue to lose incremental loan market share to the broader banking system. The liquidity advantage of state-owned banks has diminished as liquidity coverage ratios have converged. Stronger FCNR(B) mobilisation has improved funding availability for private banks, which are expected to regain market share as they reach a cyclical inflection point.
How did the NIFTY PSU Bank index perform during the trading session?
As of 12:40 pm on October 5, the NIFTY PSU Bank index retreated from its intraday high but still traded 1% higher at 8,015. This performance outpaced the NIFTY50 index, which remained flat during the same period.
