SBI shares shine along with other PSU banks; cheaper valuations make banking stocks attractive

PSU bank stocks rose on Tuesday, with India’s largest bank SBI leading the Nifty PSU Bank index with gains of almost 1.59 per cent. Healthy credit growth target by the largest state-run lender for three years down the line is a positive aspect for the bank and has made SBI stock attractive, said Anita Gandhi, Whole Time Director at Arihant Capital Markets. “The bank (SBI) has guided that by 2020, it has targeted a credit growth of about 10 per cent and an ROA (return on assets) of above one per cent — which is healthy,” Gandhi told FE Online.

State Bank of India was followed by other state-run banks Oriental Bank of Commerce (up 1.15%), Bank of India (up 1%), Canara Bank (up 0.89%), Union Bank (up 0.69%) and IDBI Bank (up 0.24%). Among other PSU banks, shares of Syndicate Bank (up 0.58%), Indian Bank (up 0.23%), Punjab National Bank (up 0.49%) and Bank of Baroda (up 0.07%) traded higher. Shares of Allahabad Bank traded down by 0.33%.

State Bank of India