Union Bank of India is the biggest laggard as Nifty PSU Bank drops more than 4% to a 6-week low due to poor Q3 business reports.

Following poor December quarter results, Indian PSU banking stocks experienced a steep decline on January 6, causing all 12 Nifty PSU Bank index stocks to fall. Union Bank was the biggest loser, falling 8%, and the index fell 4.30%, hitting a 7-week low.

Investors pounded Indian PSU banking equities during today's session, January 6, as state lenders' business reports for the December-ending quarter, which were provided over the weekend, failed to boost market confidence and caused a steep drop across all key counters.

In the late afternoon session, all 12 components of the Nifty PSU Bank index saw negative trading, with Union Bank of India being the biggest loss with an 8% decline.Other banking companies, with losses ranging from 4% to 6%, came next, including Bank of Baroda, Bank of Maharashtra, Bank of India, Indian Overseas Bank, Punjab National Bank, UCO Bank, Canara Bank, and Central Bank of India.

The Nifty PSU Bank index therefore fell 4.30% to a 6-week low of 6,334. Since the index fell 15.14% on June 4, this is the largest intraday decline.

Union Bank of India performs worse than its state-owned counterparts.

When state-owned institutions presented their December quarter business updates last week, Union Bank had the worst results. The bank stated that for the December quarter, their deposits increased by just 3.8% on an annual basis.whereas advances increased by 5.9% to ₹9.49 lakh crore, to ₹12.16 lakh crore.

Advances grew by 2.1% on a sequential basis, while deposits fell by 2%. The Bank of Baroda, among other banks, claimed that its domestic deposits increased by 9.23% and its global deposits increased by 11.82%, totaling ₹13.92 lakh crore. In terms of advances, the bank reported ₹11.71 lakh crore in Q3FY25, a rise of 11.76% in domestic advances and an 11.65% gain in worldwide advances.

With an 18.83% increase in domestic advances to ₹1.83 lakh crore, UCO Bank reported a 16.20% year-over-year gain in total advances to ₹2.08 lakh crore.Domestic deposits increased by 7.29% to ₹2.65 lakh crore during the quarter, while deposits increased 9.37% to ₹2.80 lakh crore.

However, Bank of India recorded double-digit growth in gross advances to ₹6.51 lakh crore in Q3 FY25, up 15.31% year-over-year from ₹5.65 lakh crore in Q3 FY24.

In Q3 of FY25, the bank's total deposits increased by 12.29% year over year to ₹7.94 lakh crore. The bank's overall business increased by 13.63% year over year to ₹14.46 lakh crore from ₹12.72 lakh crore at the same time prior year.