SBI, PNB, BoB to Canara Bank: Why experts are bullish on PSU bank shares — explained

livemint.com:

Stocks to buy today: In post-Covid rebound, state-owned banks have given whopping return to its positional investors in last one year. PSU bank major Bank of Baroda (BoB) shares have almost doubled shareholders' money by logging around 95 per cent return in last one year. Shares of Punjab National Bank of PNB also matched with BoB shares as the PNB share price ascended near 90 per cent in last one year.

Bank of Maharashtra share price went up around 97 per cent in last one year. Canara Bank share price surged more than 55 per cent in last one year whereas SBI added over 20 per cent in this time. According to stock market experts, after the central government's 'band loan initiative', most of the PSU banks are sitting on a huge cash reserve and hence they are ready to provide credit line at a reasonable interest rate.

This has attracted small and medium sized companies in post-Covid theme. This helped these PSU banks to create a new credit history in corporate world. They went on to add that due to fast approaching Lok Sabha elections 2024, central government is expected to push its infrastructure, road, railways and other projects.

This would also help PSU banks to improve their CASA and LAM (Logical Access Management). So, rally in PSU bank shares may continue for short to medium term. However, they maintained that only those PSU bank shares would perform who have the ability to match with ICICI Bank and HDFC Bank (after merger).