Indian PSU banking stocks were hammered by investors in today’s session, January 6, as the business updates for the December-ending quarter released by state lenders over the weekend failed to cheer market sentiment, leading to a sharp decline across all major counters.
All 12 constituents of the Nifty PSU Bank index traded in negative territory in the late afternoon session, with Union Bank of India emerging as the top loser, dropping 8%. It was followed by other banking stocks, including Bank of Baroda, Bank of Maharashtra, Bank of India, Indian Overseas Bank, Punjab National Bank, UCO Bank, Canara Bank, and Central Bank of India, all trading with losses ranging between 4% and 6%.
As a result, the Nifty PSU Bank index declined 4.30% to hit a 6-week low of 6,334. This marks the biggest intraday drop for the index since June 4, when it plunged 15.14%.
Union Bank of India lags among state-owned peers
Union Bank’s December quarter business updates were the poorest among state-owned lenders who released the updates last week. The bank reported that its deposits grew by only 3.8% year-on-year for the December quarter, reaching ₹12.16 lakh crore, while advances grew by 5.9% to ₹9.49 lakh crore.
On a sequential basis, deposits declined by 2%, while advances increased by 2.1%. Among other banks, the Bank of Baroda reported a 9.23% growth in domestic deposits and an 11.82% rise in global deposits, reaching ₹13.92 lakh crore. On the advances front, the bank posted an 11.76% increase in domestic advances and an 11.65% growth in global advances in Q3FY25, amounting to ₹11.71 lakh crore.
UCO Bank reported a 16.20% year-on-year growth in total advances, which rose to ₹2.08 lakh crore, driven by an 18.83% growth in domestic advances that reached ₹1.83 lakh crore. Deposits jumped 9.37% during the quarter to ₹2.80 lakh crore, with domestic deposits rising by 7.29% to ₹2.65 lakh crore.
On the other hand, Bank of India reported double-digit growth in gross advances, which increased by 15.31% year-on-year to ₹6.51 lakh crore in Q3 FY25, compared to ₹5.65 lakh crore in Q3 FY24.
The bank’s total deposits grew by 12.29% year-on-year to ₹7.94 lakh crore in Q3 FY25. The total business of the bank improved by 13.63% year-on-year, reaching ₹14.46 lakh crore, compared to ₹12.72 lakh crore in the same period last year.
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