PSU banks are quietly eating private banks’ lunch? Motilal Oswal says HDFC Bank, ICICI Bank, SBI and AU Bank matter most
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Public sector banks are clawing back market share in MSME and home loans, reshaping competitive dynamics across India’s financial system. Yet even as PSUs tighten the squeeze on private lenders, Motilal Oswal said investors should still anchor portfolios around HDFC Bank, ICICI Bank, State Bank of India and AU Bank as the credit cycle enters a more disciplined, execution-led phase. Public sector banks are no longer just holding ground; they are actively taking share. According to Motilal Oswal’s latest note on financials, PSU banks have emerged as the dominant force in MSME lending over the past six to nine months, compressing the long-standing pricing and execution advantage of private lenders. Faster turnaround times, CGTMSE-backed structures and repo-linked pricing have tilted the playing field. Even so, the brokerage says the stocks that “matter most” for investors remain HDFC Bank, ICICI Bank, State Bank of India and AU Bank. PSU ban...