Archive · 31 Oct 2025
PSU Bank Stocks Rally on Positive Q2 Results and SEBI Norms
Many bank stocks that are owned by the government did really well on Friday.
This happened because the banks shared good news about how much money they made in the last few months.
Also, a big financial regulator made some new rules about stock market trading that could mean more banks are added to an important stock market index.
People are also talking about some banks possibly joining together, and maybe letting more foreign investors buy shares in these government-owned banks.
For example, Canara Bank and Bank of Maharashtra shared great news about growing their loans and deposits.
Indian Overseas Bank saw a huge jump in its profits.
These good numbers and positive news made investors want to buy more shares of these banks, pushing their prices up.
Major public sector bank stocks saw gains of up to 5% on Friday.
The Nifty PSU Bank Index closed at an all-time high of 8,184.35.
Positive Q2 FY26 results and SEBI's new norms for Bank Nifty eligibility criteria fueled the rally.
Speculation about potential mergers (Union Bank, Bank of India) and increased FDI limits also contributed.
Several PSU banks reported strong loan and deposit growth, along with significant profit increases in Q2 FY26.
- Who
- Public sector banks including Union Bank, Canara Bank, Punjab National Bank, Bank of Baroda, Bank of Maharashtra, Indian Overseas Bank, and Bank of India.
- What
- Shares of major public sector banks rallied significantly, with the Nifty PSU Bank Index gaining 1.56%.
- When
- Friday, October 31, 2025 (and the period covering Q2 FY26 results).
- Where
- India
- Why
- Positive Q2 FY26 results, SEBI's new derivatives trading eligibility criteria for non-benchmark indices (potentially increasing Bank Nifty constituents to 14), speculation of mergers (Union Bank and Bank of India), and potential increase in FDI limits in PSUs.
- Nifty PSU Bank Index Performance
- Gained 1.56% on Friday, closing at 8,184.35.
- Top Gainers
- Union Bank, Canara Bank, Punjab National Bank, Bank of Baroda
- Canara Bank Q2 FY26 Highlights
- Loan growth: 13.7% YoY, Deposit growth: 13% YoY, PAT growth: 19% YoY, ROA: 1.1%
- Bank of Maharashtra Q2 FY26 Highlights
- Advances growth: 15.3% YoY, Deposits growth: 14.1% YoY, Net profit growth: 23% YoY, ROA: 1.8%
- Indian Overseas Bank Q2 FY26 Highlights
- Net profit growth: 58% YoY, ROA expansion: 6 bps QoQ to 1.2%, Loan growth: 20% YoY
- Bank of India Q2 FY26 Highlights
- Net profit growth: ~8% YoY, Loan growth: 14% YoY
Sources
FDI inflows surge in fintech space on digital transformation push
From Blackstone to SMBC: Why global investors are lining up for Indian banks
Sebi’s move helps Nifty PSU Bank hit lifetime high
Banks attract foreign investments on low valuation, high growth prospects
3 ‘Buy’ recommendations by Jefferies with up to 22% upside potential
