Best PSU Banks Stocks – PSU Banks Stock

PSU bank stocks refer to shares of Public Sector Undertaking (PSU) banks in India, where the government holds a majority stake. These banks are government-owned and include institutions like the State Bank of India (SBI) and Punjab National Bank, offering essential banking services while being influenced by government policies.

The table below shows the PSU banks stock based on the highest market capitalisation and 1-year return.

Introduction to Top PSU Bank Stocks

State Bank of India

The Market Cap of the State Bank of India is Rs. 697,636.95 crores. The stock’s monthly return is -3.21%. Its one-year return is 30.04%. The stock is currently 16.67% away from its 52-week high.

The State Bank of India is a banking and financial services provider headquartered in India. The company offers a diverse range of products and services to individuals, commercial enterprises, corporates, public bodies, and institutional customers. 

Its operations are divided into segments such as Treasury, Corporate/Wholesale Banking, Retail Banking, Insurance Business, and Other Banking Business. The Treasury segment focuses on investment and trading in foreign exchange and derivative contracts. The Corporate/Wholesale Banking segment includes lending activities for corporate accounts, commercial clients, and stressed assets resolution.  

Bank of Baroda Ltd

The Market Cap of Bank of Baroda Ltd is Rs. 121,785.58 crores. The stock’s monthly return is -4.78%. Its one-year return is 10.33%. The stock is 27.26% away from its 52-week high.

The Bank of Baroda Limited operates within the banking and financial services sector in India. Its business is divided into segments including Treasury, Corporate / Wholesale Banking, Retail Banking, and Other Banking Operations. The company’s operations are further categorized into Domestic Operations and Foreign Operations. 

The bank offers various personal banking services like savings accounts, current accounts, and term deposits. It also provides a range of digital banking products such as Internet banking, mobile banking, cards, WhatsApp banking, digital signage systems (DSS), self-service passbook printers, and automated teller machines (ATMs). Furthermore, the bank offers different types of loans including home loans, personal loans, vehicle loans, fintech loans, education loans, and gold loans.  

Punjab National Bank

The Market Cap of Punjab National Bank is Rs. 119,370.42 crores. The stock’s monthly return is -7.31%. Its one-year return is 41.81%. The stock is 31.81% away from its 52-week high.

Punjab National Bank (PNB) is a bank headquartered in India. It operates through various segments including Treasury Operations, Corporate/Wholesale Banking, Retail Banking, and Other Banking Operations. The bank offers a range of products including personal, corporate, international, and capital services. 

Personal products encompass deposits, loans, housing projects, NPA settlement options, accounts, insurance, government services, financial inclusion, and priority sector services. Corporate offerings include loans, forex services for exporters/importers, cash management, and a gold card scheme for exporters.  

Indian Overseas Bank

The Market Cap of Indian Overseas Bank is Rs. 110,465.70 crores. The stock’s monthly return is -7.73%. Its one-year return is 33.27%. The stock is 43.31% away from its 52-week high.

The Indian Overseas Bank, also known as the Bank, operates in the banking sector with various segments such as Treasury, Corporate/Wholesale Banking, Retail Banking, and Other Banking Operations. 

The Bank’s activities consist of domestic deposits, domestic advances, foreign exchange operations, investments, services related to micro, small, and medium enterprises, including the MUDRA Loan Scheme, retail banking services like Arogya Mahila Savings Bank Accounts, Mid Corporate department, agricultural credit portfolio, loans to small and marginal farmers, loans to non-corporate farmers and microfinance.  

Canara Bank Ltd

The Market Cap of Canara Bank Ltd is Rs. 95,205.56 crores. The stock’s monthly return is -4.97%. Its one-year return is 41.46%. The stock is 22.81% away from its 52-week high.

Canara Bank Limited (the Bank) is a bank based in India that operates in various segments, including Treasury Operations, Retail Banking Operations, Wholesale Banking Operations, Life Insurance Operations, and Other Banking Operations. The Bank offers a wide range of products and services, such as personal banking and corporate banking. 

Personal banking services include depository services, mutual funds, ancillary services, technology products, retail loan products, micro, small, and medium enterprise loan products, and card services, among others. Corporate banking services encompass accounts and deposits, supply chain finance management, syndication services, and technology upgradation fund schemes, among others. 

Union Bank of India Ltd

The Market Cap of Union Bank of India Ltd is Rs. 94,221.65 crores. The stock’s monthly return is 1.26%. Its one-year return is 23.93%. The stock is 39.76% away from its 52-week high.

Union Bank of India Ltd. is a banking company based in India, offering various services through different segments. These segments include Treasury Operations, Corporate and Wholesale Banking, Retail Banking Operations, and Other Banking Operations.   

The Treasury Operations segment provides a variety of account options, such as savings and current accounts, term and recurring deposits, and demat and online trading accounts.   The Corporate and Wholesale Banking segment offers services like trade finance, working capital facilities, lines of credit, project financing, and channel finance. This segment also provides assistance with debt structuring/restructuring, loan syndication, structured finance, mergers and acquisition advisory, and private equity services.   

Indian Bank

The Market Cap of Indian Bank is Rs. 68,627.81 crores. The stock’s monthly return is -7.85%. Its one-year return is 22.73%. The stock is 24.18% away from its 52-week high.

Indian Bank is involved in the provision of banking and financial services, with operations divided into different segments. These segments consist of Treasury, Corporate/Wholesale Banking, Retail Banking, and Other Banking Business. The Treasury Segment oversees the investment portfolio, foreign exchange, and derivative trading. 

The Corporate/Wholesale Banking segment manages lending activities for corporate accounts, commercial clients, and distressed assets. This segment offers loans and transaction services to corporate and institutional clients, as well as non-treasury operations for foreign offices.  

UCO Bank

The Market Cap of UCO Bank is Rs. 57,304.91 crores. The stock’s monthly return is -8.81%. Its one-year return is 9.30%. The stock is 47.40% away from its 52-week high.

UCO Bank is an India-based commercial bank that operates through four key segments: Treasury Operations, Corporate Banking Operations, Retail Banking Operations, and Other Banking Operations. 

The bank provides a range of services, including corporate banking, international banking, government business, and rural banking. Corporate banking services encompass debt/foremost, credit growth, deposits, and value-added services. International banking services cater to non-resident Indian (NRI) banking, foreign currency loans, finance/export to exporters, finance/import to importers, remittances, foreign exchange and treasury services, resident foreign exchange (domestic) deposits, and contact banking.  

Central Bank of India Ltd

The Market Cap of Central Bank of India Ltd is Rs. 50,939.75 crores. The stock’s monthly return is -3.42%. Its one-year return is 19.88%. The stock is 31.05% away from its 52-week high.

Central Bank of India Limited, an Indian commercial bank, provides a range of banking services such as digital banking, deposits, retail and corporate loans, agricultural services, support for micro, small, and medium enterprises, offerings for non-resident Indians, and services catering to pensioners. 

Its digital banking options encompass Internet and mobile banking, Cent M-Passbook, debit and credit cards, missed call feature, railways ticket booking, as well as ATM and POS services. Deposits offerings consist of savings and current accounts, time deposits, recurring deposit schemes, small saving schemes, and competitive interest rates. 

Bank of India Ltd

The Market Cap of Bank of India Ltd is Rs. 50,215.93 crores. The stock’s monthly return is -6.84%. Its one-year return is 3.96%. The stock is 43.20% away from its 52-week high.

Bank of India Limited (the Bank) is an India-based financial institution. It is divided into distinct segments comprising Treasury Operations, Wholesale Banking Operations, and Retail Banking Operations. The Treasury Operations segment deals with the bank’s investment portfolio, including government and other securities trading, money market activities, and foreign exchange operations. 

The Wholesale Banking Operations segment encompasses all loans and advances not categorized under retail banking. In contrast, the Retail Banking Operations segment includes exposures that must meet specific criteria related to maximum aggregate exposure and total annual turnover.  

What Are PSU Bank Stocks In India?

Public Sector Undertaking (PSU) bank stocks in India refer to shares of banks that are owned and operated by the government. These institutions play a significant role in the Indian financial system, providing essential banking services and facilitating economic growth.  

Investing in PSU bank stocks can offer opportunities for investors, particularly due to the backing of government support. These banks often focus on priority sectors, including agriculture and small businesses, making them crucial for infrastructure development and financial inclusion within the country.

Features Of PSU Bank Stocks List

The key features of PSU bank stocks highlight their government ownership, which ensures stability but also subjects them to regulatory influence. These banks play a crucial role in India’s financial system and are affected by government policies and economic conditions.

1. Government Ownership: PSU banks are majority-owned by the government, providing a sense of stability. This ownership means these banks often receive government support during economic challenges or crises, reducing the risk of failure.
2. Dividend Potential: PSU banks typically offer regular dividends to shareholders, making them attractive to income-seeking investors. The government’s interest in these banks ensures consistent profitability, leading to reliable dividend payouts.
3. Exposure to Rural Economy: PSU banks are highly involved in rural and priority sector lending, offering exposure to India’s agricultural and small business sectors. This makes them essential players in the country’s economic development.
4. Regulatory Influence: Government policies, such as loan waivers or directed lending, can significantly impact the financial performance of PSU banks. Investors need to consider how regulatory changes might affect profitability and growth.
5. Lower Valuations: PSU bank stocks often trade at lower valuations compared to private sector banks due to concerns about non-performing assets (NPAs) and lower efficiency. However, this also creates potential for value investors seeking long-term gains.

Best PSU Stocks In India 2024 Based on 6 Month Return

The table below shows the best PSU stocks in India 2024 based on 6-month returns.

Top PSU Stocks In India Based on 5 Year Net Profit Margin

The table below shows the top PSU stocks in India based on 5-year net profit margin.

Best PSU Bank Stocks To Buy Based on 1M Return

The table below shows the best PSU bank stocks to buy based on a 1-month return.

High Dividend Yield List Of PSU Bank Stocks

The table below shows the high dividend yield list of PSU bank stocks.

Historical Performance of PSU Bank Stocks

The table below shows the historical performance of PSU bank stocks based on 5-year CAGR.

Factors To Consider When Investing In PSU Bank Stocks In India

The factor to consider when investing in PSU bank stocks in India is their dependence on government policies and economic conditions. These banks often face challenges like non-performing assets (NPAs) but offer long-term stability due to government backing.

1. Government Influence: PSU banks are closely tied to government policies, such as loan waivers or interest rate decisions. Investors need to monitor policy changes that can impact the profitability and operational efficiency of these banks.
2. Asset Quality: High non-performing assets (NPAs) are a common challenge for PSU banks. Evaluating the bank’s efforts to reduce bad loans and improve asset quality is essential for assessing long-term growth potential.
3. Capital Infusion: PSU banks often rely on capital infusions from the government for stability and expansion. Investors should consider the government’s commitment to supporting these banks through recapitalization plans when needed.
4. Profitability and Efficiency: PSU banks generally have lower profitability and efficiency compared to private banks. Reviewing key financial ratios like return on assets (ROA) and net interest margin (NIM) can help investors understand performance.
5. Dividend Yield: Many PSU banks offer attractive dividend yields. Investors looking for regular income should assess the bank’s dividend history and payout ratio to determine if the stock aligns with their income goals.

How To Invest In Best PSU Banks Stocks India?

Investing in the top PSU bank stocks in India requires a strategic approach. Begin by researching leading public sector banks with strong fundamentals and consistent performance, such as the State Bank of India and the Bank of Baroda. Analyze their financial health, market trends, and growth prospects. Utilize reliable trading platforms, like Alice Blue, to execute your investments efficiently. 

Impact of Government Policies on PSU Bank Stocks India

Government policies have a significant impact on PSU bank stocks in India, as these banks are majority-owned by the government. Policies such as interest rate adjustments, loan waivers, and financial support directly affect the performance and profitability of PSU banks.

For instance, government-mandated loan waivers can increase the non-performing assets (NPAs) of PSU banks, reducing profitability. Similarly, directed lending to priority sectors can impact their financial stability and risk management practices.

On the other hand, government capital infusions and reforms aimed at improving efficiency can enhance the financial health of PSU banks, making their stocks more attractive to investors.

How Top PSU Banks Stocks In India Perform in Economic Downturns?

Top PSU bank stocks in India, like SBI, PNB, and Bank of Baroda, tend to face pressure during economic downturns due to rising non-performing assets (NPAs), reduced credit demand, and higher provisioning costs. However, their government backing and regulatory support help maintain stability. They may underperform compared to private banks, but recover relatively well in the long term as the economy stabilizes, benefiting from government initiatives and reforms.   

Advantages Of Investing In PSU Banks Stocks In India For Long Term?

The primary advantage of investing in PSU bank stocks in India for the long term is their government backing, which offers a degree of financial stability. These banks play a crucial role in the Indian economy and are often supported during economic challenges.

1. Government Support: PSU banks receive strong financial backing from the government, which provides capital infusions during times of need, ensuring long-term stability and reducing the risk of insolvency.
2. Attractive Valuations: PSU bank stocks often trade at lower valuations compared to private sector banks, offering value investors the opportunity to buy into well-established institutions at a discount, with potential for long-term gains.
3. Regular Dividends: Many PSU banks offer regular dividends, providing a steady income stream for long-term investors. Government ownership often ensures stable payouts, making these stocks appealing for dividend-seeking investors.
4. Economic Growth Exposure: PSU banks are deeply involved in sectors like agriculture, infrastructure, and rural development. As the Indian economy grows, these sectors drive demand for banking services, benefiting long-term investors.
5. Reduced Competition Risk: Due to their size and government backing, PSU banks face less competitive pressure in key markets, particularly in rural and priority sectors. This stability allows for steady long-term growth opportunities.

Risks Of Investing In Best PSU Banks Stocks In India For Long Term?

The main risk of investing in the best PSU bank stocks in India for the long term is their vulnerability to government policies and economic fluctuations. These factors can impact their profitability, asset quality, and overall performance over time.

1. High NPAs: PSU banks often struggle with high non-performing assets (NPAs), which reduce profitability. Persistent bad loans can erode capital, limiting the bank’s ability to grow or pay dividends in the long run.
2. Lower Operational Efficiency: Compared to private sector banks, PSU banks generally have lower operational efficiency, affecting their ability to adapt quickly to market changes and customer needs, which may limit long-term growth prospects.
3. Government Influence: Frequent government intervention in lending decisions, such as mandated loan waivers or priority sector lending, can hurt profitability and lead to higher risks, reducing returns for long-term investors.
4. Capital Dependency: PSU banks often rely on capital infusions from the government to remain financially stable. While this provides short-term relief, it may signal underlying issues that could impact long-term performance.
5. Slow Technological Adoption: Many PSU banks lag behind private banks in adopting new technologies and digital banking solutions. This slower adoption can limit customer engagement and growth in a technology-driven financial landscape.

Top PSU Banks Stocks India GDP Contribution

Top PSU bank stocks in India play a crucial role in the country’s GDP contribution by providing essential banking services such as lending, deposit collection, and financial inclusion, particularly in rural and underserved areas. These banks are heavily involved in priority sector lending, infrastructure financing, and agriculture, which are key drivers of economic growth.

Additionally, PSU banks support government schemes aimed at boosting the economy, such as Pradhan Mantri Jan Dhan Yojana and Mudra loans. By facilitating credit access and financial services, they significantly contribute to India’s overall economic development and GDP growth.

Who Should Invest In Best PSU Bank Stocks?

Investing in the best PSU bank stocks is ideal for those seeking long-term stability and exposure to India’s banking sector. These stocks offer the potential for steady dividends and government-backed security, making them suitable for certain types of investors.

1. Long-Term Investors: Those with a long investment horizon can benefit from the stability and gradual growth potential of PSU bank stocks, particularly as the government supports these institutions during economic downturns.
2. Dividend Seekers: Investors looking for regular income can consider PSU bank stocks, as many of these banks offer consistent dividend payouts, making them appealing for those seeking periodic returns.
3. Risk-Averse Investors: Due to government backing, PSU banks provide a relatively safer investment option compared to riskier private sector counterparts, making them suitable for investors seeking moderate risk with steady returns.
4. Value Investors: Investors who prefer buying undervalued stocks may find opportunities in PSU banks, as these stocks often trade at lower valuations compared to private banks, offering the potential for long-term appreciation.

Best PSU Bank Stocks – FAQs

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Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.