PSU banks in focus; SBI, Canara Bank gain 2% in subdued market; here's why

As of 10:45 AM, the Nifty PSU Bank index was up 1 per cent, as compared to a 0.16 per cent decline in the Nifty 50.

Share price movement of PSU banks today

Shares of public sector banks (PSBs) are in focus, with the Nifty PSU Bank index gaining 1 per cent on the National Stock Exchange (NSE) in Wednesday's intra-day trade in otherwise a subdued market. In comparison, the Nifty 50 was down 0.16 per cent at 25,819 at 10:45 AM.

 

State Bank of India (SBI), Canara Bank and Bank of India were up 1 per cent in intra-day trade. Punjab National Bank, Indian Bank and Bank of Baroda from the PSU Bank index up 1 per cent.

Why PSU bank shares are in focus today?

Among the individual banks, Canara Bank has gained 2 per cent to ₹150.68 amid heavy volumes. A combined 8.4 million equity shares were changing hands on the NSE and BSE. The stock had hit a 52-week high of ₹154.21 on December 2, 2025.

 

According to the Business Standard report, for the first time, six candidates from the private sector have applied for the post of Managing Director (MD) and Chief Executive Officer (CEO) of public sector lender Canara Bank.

 

Meanwhile, the Appointments Committee of the Cabinet (ACC) has re-appointed Ashwini Kumar Tewari as managing director (MD) of SBI for another term from January 27, 2026, to December 31, 2027. His term was scheduled to end in January 2026. Tewari currently oversees corporate banking and subsidiaries at SBI. 

 

Earlier this week, the government appointed Ravi Ranjan as managing director with effect from December 15, 2025, till September 30, 2028.

 

Analysts at Axis Direct have a 'buy' rating on SBI with a target price of ₹1,135 per share. SBI remains well poised to continue its growth with no visible challenges to growth and asset quality. With NIM trajectory reversing earlier than anticipated, the brokerage firm raised its FY26 net interest income (NII) estimates by 3 per cent. 

 

However, strong traction on fee income, controlled opex keeping cost ratios under check and a strong asset quality profile keeping credit costs benign, analysts raise earnings estimates over FY27-28 by 3-5 per cent. The brokerage firm expects SBI to deliver a steady Advances/Deposits/NII/Earnings growth of 13/11/14/9 per cent CAGR over FY26-28. 

 

Meanwhile, in the second quarter (July to September) of the financial year 2025-26 (Q2FY26), the net profit of public sector banks (PSBs) recorded a year-on-year (Y-o-Y) growth rate of 4.7 per cent, as compared to a decline of 2.1 per cent YoY for Private Sector Banks (PVBs). The rise in PSB profits is mainly attributed to fee income and treasury gains, alongside credit growth in the retail and MSME segments, and normalised operating expenses, according to CareEdge Ratings

 

According to Saurabh Bhalerao of CareEdge Ratings, "PSBs continue to outperform PVBs, supported by a favourable base and moderate CD ratio. Return on assets is expected to remain stable, with a slight improvement anticipated in the second half of the year. Overall asset quality remains robust, with gross NPAs declining across both PSBs and PVBs. Additionally, capital adequacy remains strong, supported by recent bond issuances, QIPs and planned capital-raising initiatives for the remainder of the fiscal year." 

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