The only problem is that the data does not bear this out. There were times when out of the total listed PSBs, only a couple of them made profits.
But now, there’s a ray of hope.
Out of the 13 listed PSBs, 11 of them have posted a net profit in fiscal 2021. The two exceptions are Punjab & Sind Bank and Central Bank of India.
The Union Budget 2022 has laid out a massive capex plan which will need huge infra funding.
If capex has to pick up, funding is required. The shift has already started to happen from retail focused banks to corporate banks. All PSU banks are big funders of capital expenditure, making them the biggest beneficiaries.
But PSU banks are notorious.
In fact, given the NPA crisis in the Indian banking sector, quite a few public-sector banks would have gone under water if not for government’s intervention.
That is why it’s crucial you keep track of your bank’s financials. Choose only those banks whose bad loans are within reasonable limits.
Let’s take a look at the top 4 PSU banks which you should watch out for as the massive infra funding takes place…
#1 State Bank of India (SBI)
No prizes in guessing the first bank on our list. You probably thought of State Bank of India (SBI) when you opened this article.SBI, which has been actively funding capex for infrastructure, is set to be one of the biggest beneficiaries as the capex boom plays out.For instance, the Adani group last year readied plans for a ₹150-bn funding from SBI for its Navi Mumbai airport. This is one of the largest project financing loans, signaling the return of capex loans for infrastructure projects.Reports state that SBI has completed the project appraisal and is now finalising contours of the loan, which is likely to be for 15 years.SBI might be the largest lender in India but not the most efficient one. For very long, the bank has struggled with the bad debt problem.SBI has had a history of reporting higher provision every passing year. Higher provisions eat up a major chunk of its revenue leaving no or little money for investors.But now, SBI appears to be scripting a turnaround.The incorporation of a national asset reconstruction company (NARCL) has given the bank a big boost. NARCL is a government entity that will buy the bad loans from the Indian banks thereby helping them clean their […]
