Explained — Why shares of PSU Banks rose up to 6% on Monday

The Nifty PSU Bank index is up nearly 4% in Monday's session, with all 12 constituents trading in the green.

Buying interest is visible across state-run lenders, led by State Bank of India, which is the top gainer on the index with gains of over 6%.

Bank of India, Indian Bank, Punjab and Sind Bank, and UCO Bank are also higher, rising up to 4%.



SBI's rally follows its December quarter earnings, which analysts described as an exceptionally strong performance in the current operating environment.

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The bank's domestic loan growth stood at 15.6% YoY, higher than loan growth reported by the top four private sector banks and the top seven PSU banks.

Corporate loan growth came in at 13.4% YoY, while deposit growth was recorded at 9%, broadly in line with expectations.

SBI's credit-deposit ratio crossed the 80% mark for the first time since FY16, rising to 81% from 78% in the previous quarter.

Management also raised its domestic loan growth guidance to 13-15% from 12-14%, citing strong traction across segments.

Pre-provision operating profit posted a sharp beat, growing 40% YoY, around 17% above estimates, aided by a 66% YoY jump in other income and muted operating expense growth of just 6% YoY.

Net interest margin guidance was maintained at 3%, with the bank reporting NIM of 2.99% for the quarter.

The broader Nifty PSU Bank index surged 3.6% intraday to hit a fresh record high of 9,193, surpassing its previous peak of 9,175.55 recorded on January 29, 2026.

The index has risen in five of the last six trading sessions.

On a longer-term basis, PSU banks have outperformed the broader market. Over the past one month, the index has gained 7% compared with a 0.5% rise in the Nifty 50.

Over the past five months, the PSU Bank index has jumped 34%, far ahead of the benchmark's 3.8% advance.