SBI, PNB, Bank of India: NIFTY PSU Bank index jumps 1.5%, hits an all-time high of 9,647; here is why

The measure of state-run lenders on the National Stock Exchange (NSE), NIFTY PSU Bank index, surged as much as 1.54% or 146 points to hit a record high of 9,647 on Wednesday, February 18. All the 12 shares in the index were trading higher led by Punjab National Bank's over 3% gain. Bank of Maharashtra, Punjab & Sind Bank, Union Bank of India, Indian Overseas Bank, UCO Bank, Indian Bank and Canara Bank also rose between 1.9%-2.6%.

State-run lenders came under buying interest after they reported strong set earnings in December quarter. Asll the state-run banks reported an improvement in asset quality, strong growth in profitability and expansion in net interest margins (NIMs) leading to buying in these shares, analysts noted.

State Bank of India (SBI), the country's largest lender, reported its highest-ever net profit in the third quarter of current financial year. SBI earlier this month reported net profit of ₹21,028 crore in the third quarter of current financial year, marking an increase of 24.5% from ₹16,891 crore in the same period last year.

The bank's net interest income or the difference between interest earned on loans and expended on deposits advanced 9% to ₹45,200 crore from ₹41,445 crore in the year-ago period.

SBI's asset quality showed an improvement in October-December period as its gross non-performing assets (NPA), as a percentage of total advances improved to 1.57% from 2.07% in the corresponding period last year. In absolute terms gross NPAs came in at ₹73,637 crore.

Punjab National Bank (PNB) last month reported net profit of ₹5,100 crore in the third quarter of current financial year (Q3FY26), marking an increase of 13% from ₹4,508 crore in the same period last year.

The Delhi-based lender's asset quality showed an improvement during the quarter as its gross non-performing assets (NPAs), as a percentage of total advances, eased to 3.19% from 4.09% in the corresponding period last year. On a sequential basis the gross NPAs came down from 3.45%.

Its net NPAs eased to 0.32% as against 0.41% in the year-ago period.

Canara Bank's GNPA ratio improved to 3.34% as on December 31, 2024 from 3.73% in September quarter and 4.39% at the end of the year-ago period. NNPA ratio improved to 0.89% as of December 2024 from 0.99% as at September-end and 1.32% in the year-ago period.

Bank of India posted a 7.4% YoY surge in its net profit to ₹2,705 crore for the December quarter of FY26, compared to ₹2,518 crore it logged in the same period of the previous fiscal year.

Its NII advanced 6.43% annually to ₹6,461 crore during the quarter under review, as against ₹6,070 crore in the third quarter of the 2024-25 fiscal year (Q3FY25).

Its asset quality improved both annually and sequentially, as its GNPA stood at 2.26%, down by 143 basis points (bps) YoY and 28 bps quarter-on-quarter (QoQ) from 3.69% and 2.54%, respectively.

As of 3:14 pm, NIFTY PSU Bank index was the top sectoral gainer on the NSE, with 1.3% gain.