These five bank stocks appear ready for a bull run

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Subscribe to enjoy similar stories. As India's economy surges ahead, the banking sector remains a focal point for investors. In 2024, despite the momentum in financialisation, the Nifty Bank index has underperformed, rising only 7% compared to the Nifty 50's impressive 15.6% gain.

This gap signals investor hesitation, with key banking stocks hovering around critical levels in both the public and private sectors. However, many banks maintain solid fundamentals and have the potential to outperform in the coming years. Strong asset quality, stable capital positions, and ongoing digital transformations provide a solid foundation for future growth, despite moderating expectations around credit growth and profitability in the short term.

In this article, we’ll explore the top five banking stocks that seem ready for a bull run. Whether you’re a seasoned investor or new to the market, these stocks have the potential for significant returns in the future. Ujjivan Small Finance Bank (USFB) focusses on financial inclusion for underserved segments, targeting 20% growth in its asset book for FY25.

It is also targeting a 35% secured book by the end of the financial year and actively pursuing a universal bank license. The bank aims to enhance the quality of its loan book by increasing the proportion of secured loans, recognising that its current mix leans heavily towards unsecured lending at a ratio of 72:28. It is also restructuring its housing loan product and expanding into new areas such as gold loans, mutual funds, and fintech collaborations.