Top and Best Banking Stocks (PSU) to Invest in 2016

Top and Best Banking Stocks PSU to Invest in 2016Top and Best Banking Stocks (PSU) to Invest in 2016


In the last 1 year, Banking stocks have been hammered. PSU Bank stocks got hammered due to higher provisions made by them on NPA’s as per guidelines of RBI. Many stocks fallen by almost 85% of their stock prices. We could see some revival in PSU Banks now. Which are the best picks among PSU Bank Stocks now? Which are the top PSU Banks which you can invest in 2016 for the long term? I would try to analyze some of the stocks that have potential to grow in short term to long term.

The worst is still not over!!!


PSU Banks have been hammered due to losses announced by the banks for higher provisioning guidelines from RBI. Even, a couple of days back, Fitch have downgraded Banking outlook from Stable to Negative. We could see some more correction to these stocks. Keep checking for corrections and invest in these stocks for medium to long term. These top stocks are picked up only from the NIFTY Bank segment.

Also Read: 10 Best Stocks based on Warren Buffer Principles – Should you invest?

Top and Best Banking Stocks (PSU) to Invest in 2016


Stock prices indicated here are as of 6th July, 2016.

1) Allahabad Bank – CMP – Rs 77


About the bank: Allahabad Bank is a nationalized bank with its headquarters in Kolkata. It is the oldest joint stock bank in India. On 24 April 2016, the bank entered into its 152nd year of establishment. It was founded in Allahabad in 1865.

Stock price performance: Currently this stock gave negative 14% returns in last 1 year. However, in last 1 month, this stock price has raised by almost 50% indicating a strong bounce back.  

Allahabad Bank has posted net loss of Rs 581 Crores for the Q4 quarter ended Mar-16. It substantially raised the amount towards bad loans provisioning in accordance with RBI's asset quality directives. The bank almost quadrupled the provisioning and the contingency amount to Rs 2,487 crore for the quarter ended March 2015-16, as against Rs 631 crore kept aside for the same period a year ago.

2) Punjab National Bank – CMP – Rs 114


About the bank: Punjab National Bank is an Indian multinational banking and financial services company. It is a state-owned corporation based in New Delhi, India. Founded in 1894, the bank has over 6,968 branches and over 9,656 ATMs across 764 cities

Stock price performance: This stock got hammered in the last 1 year along with other largest PSU Bank stocks. Currently this stock gave negative 21% returns in last 1 year. However, in last 1 month, this stock price has raised by almost 48% indicating a strong bounce back.

Punjab National Bank reported a net loss of Rs 5,367 crore for the fourth quarter ended March 2016 against net profit of Rs 306 crore in the same quarter a year ago.  Provisions of the bank jumped nearly 3 times, 173 per cent, to 10,485 crore for the quarter under review from Rs 3834 crore in the same quarter last year.

3) Oriental Bank of Commerce (OBC) – CMP – Rs 118


About the bank: Oriental Bank of Commerce is established in Lahore, is one of the largest public sector banks in India.

Stock price performance: This stock got hammered in the last 1 year along with other largest Bank stocks. Currently this stock gave negative 35% returns in last 1 year. However, in last 1 month, this stock price has raised by almost 42% indicating a strong bounce back.

It reported a net profit of Rs 21.62 crore in Q4 March 2016 compared with the net loss of Rs 178.44 crore in Q4 March 2015. It reported net profit in Q4 March 2016 on the back of tax reversal. The bank reported pre-tax loss of Rs 147.38 crore in Q4 March 2016. There was a tax reversal of Rs 169 crore in Q4 March 2016.

Also Read: Should you invest stocks based on Fundamental Analysis?

4) Bank of India – CMP – Rs 110


About the bank: This bank is headquartered in Mumbai with a presence in all the major trade centers of the world. Founded in 1906, nationalized in 1969.

Stock price performance: Currently this stock gave negative 40% returns in last 1 year. However, in last 1 month, this stock price has raised by almost 30% indicating a strong bounce back.

It has reported a loss of Rs 3,587 crore in Q4 that widened significantly compared to loss of Rs 56 crore in year-ago period. Operating profit increased marginally to Rs 1,464.2 crore from Rs 1,426.55 crore on yearly basis.

5) Andhra Bank – CMP – Rs 61


About the bank: It is a medium-sized public sector bank (PSB) of India, with a network of 2803 branches, 4 extension counters, 38 satellite offices and 3636 automated teller machines (ATMs) as of 31-Mar-2016.

Stock price performance: Currently this stock gave negative 13% returns in last 1 year. However, in last 1 month, this stock price has raised by almost 25% indicating a strong bounce back.

Andhra Bank reported about 72.1 per cent fall in its net profit at Rs 51.6 crore for the quarter ended March, due to higher provisioning and slippages. The net profit for the corresponding quarter last year was Rs 185.2 crore. However, there was about 17 per cent increase in operating profit (before provisions and contingencies) during the quarter, as operating expenses remained flat on top of the income growth.

6) Syndicate Bank – CMP – Rs 79


About the bank: Syndicate Bank is one of the oldest and major commercial banks of India. At the time of its establishment, the bank was known as Canara Industrial and Banking Syndicate Limited

Stock price performance: Currently this stock gave negative 22% returns in last 1 year. However, in last 1 month, this stock price has raised by almost 24% indicating a strong bounce back.

It wrote off Rs.882.64 crore in the fourth quarter (the three months ended 31 March) because of fraud at its branches in Jaipur over the last four years. Owing to the write off and higher provisioning, the bank posts a loss of Rs 2,158.17 crore for the fourth quarter compared with a net profit of Rs s417 crore in the year-ago period.

7) Canara Bank – CMP – Rs 230


About the bank: Canara Bank is an Indian state-owned bank headquartered in Bangalore. It was established at Mangalore in 1906, making it one of the oldest banks in the country. The government nationalized the bank in 1969.

Stock price performance: Currently this stock gave negative 22% returns in last 1 year. However, in last 1 month, this stock price has raised by almost 18% indicating a strong bounce back.

It reported a standalone net loss of Rs.3,905 crore for the quarter ended March 31, 2016 as against net profit of Rs.612.96 crore in the corresponding quarter of the previous.

Also Read: Best Midcap Stocks to invest in India in 2016

8) Bank of Baroda – CMP – Rs 160


About the bank: Bank of Baroda is an Indian state-owned banking and financial services company headquartered in Vadodara in Gujarat, India.It is the second largest bank in India, next to State Bank Of India.

Stock price performance: Currently this stock gave 4% returns (positive) in last 1 year. In the last 1 month, this stock price has raised by almost 11% indicating a strong bounce back.

Bank of Baroda reported a net loss of Rs.3,230 crore for the March quarter of 2016 due to higher provisions for bad loans. The loss was restricted due to a tax write-back of Rs.1,055 crore in the quarter.

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Suresh
Top and Best Banking Stocks (PSU) to Invest in 2016

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