Q4 Banking Thriller: Canara, PNB, BoB-Who’s the Dark Horse for Your Portfolio?

The Q4 FY25 numbers have lined up a tough fight for PSU banking heavyweights-Canara Bank, Punjab National Bank (PNB), and Bank of Baroda (BoB). Let's take an in-depth look at their recent performances and what the investors should look for.

Canara Bank:

Net profit jumped 33% YoY to ₹5,004 crore, rising 22% sequentially.
Total income increased 10% YoY to ₹37,353 crore.
Asset quality enhanced: Gross NPA to 2.94%, Net NPA at 0.70%.
Net Interest Income (NII) fell 1.4% YoY to ₹9,442 crore, but operating profit increased by 12% YoY.
Announced a ₹4/share dividend, indicating robust shareholder returns.
Shares rose 5% after results, indicating market euphoria.

Punjab National Bank (PNB):

Net profit soared 52% YoY to ₹4,567 crore on the back of reduced bad loan provisions.
NII increased 4% YoY to ₹10,757 crore; non-interest income rose 11%.
Gross NPA ratio steeply improved to 3.95% from 5.73% y-o-y; Net NPA at 0.4%.
Provision cover ratio strong at 96.82%.
Net profit in FY25 more than doubled to ₹16,630 crore.
Stocks traded flat even as stellar results were announced, perhaps in reaction to profit-taking.

Bank of Baroda (BoB):

Net profit for FY25 touched a high of ₹19,581 crore, up by 10.1% year on year.
NII during Q4 fell 6.6% y-o-y at ₹11,020 crore, leaving margins with some concerns.
Return on assets (ROA) of 1.16%, return on equity (ROE) of 16.96%.
Announced liberal ₹8.35/share dividend.
Stock dipped 10% after results due to NII fall and caution in the market.

Investor Takeaway:

Canara Bank and PNB both reported good profit expansion and enhanced asset quality, with Canara Bank's dividend and share price performance particularly noteworthy. BoB's historic annual profit is impressive, but Q4 NII decline and negative stock response caution against getting too excited. For growth plus stability-seeking investors, Canara Bank and PNB appear best positioned for the next phase of PSU bank outperformance.

Sources: Business Standard, Economic Times, Business Today