InvestorQ : What are the best PSU bank stocks to invest now?
Roshni Hegde made post

What are the best PSU bank stocks to invest now?

Answer
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vani Patil answered.
1 year ago


It's good that you enquired about the best PSU stocks before you start your investment. I find this is a good platform to discuss and know more about the market. I would answer from basics and in a lucid way;

Public Sector Banks or say PSBs are type of bank in India in which the government holds more than 51% of their stake. Thus, investors find it less volatile to invest in PSU bank stocks. In our country, there are in all 18 PSUs and 1 state-owned payment bank.
Market experts say, belief to earn better earning through PSU Banks. Few PSU banks have shown betterment in loan growth and profit margin.

I find top PSU banks having positive prospects are SBI, Bank of Baroda and Canara Bank. Financial experts expect overall returns of these three banks upto 15- 16% .

SBI has disclosed its target to improve in its ROA. The bank will work on domestic loan book growth, lessening stress over asset formation, avoiding slippages, credit cost, and growth in return ratios.
Bank of Baroda will look to achieve benefits through merger synergies, also lessening stress over asset formation, avoiding slippages, credit cost, and growth in return ratios.
Canara Bank will be working to improve its asset quality and NIM prospects.

1) ROA is where bank improves by generating good profit margin and put assets to use to boost sales.
2) NIM in the bank is used to show a positive or negative trend. It indicates the financial stability of the bank. A negative NIM in the bank means the bank has failed to optimize its assets and it results in getting low returns by investments to offset interest expenses.