PSU Banks Vs Private Banks: Why Investors Are Betting Big On PSU Bank ETFs

PSU banks are emerging as a preferred investment theme as their lending growth, deposit growth and return on equity remain strong compared with private banks. Aniruddha Sarkar, Co-founder & CIO, Equinova Investment Managers, says PSU banks also offer a valuation advantage, trading at a significant discount to private peers. He believes the combination of stronger operating performance and attractive valuations makes PSU banks a better bet within the banking space. While select private banks such as ICICI Bank remain part of his portfolio, Sarkar prefers a blend of both. He uses a PSU Bank ETF to gain diversified exposure to leading state-owned lenders.