HDFC, Bandhan, AU Small Finance and other bank stocks surge as more people rushed to borrow money

• Banking stocks were the top gainers in the market as lenders reported improving performance in the December quarter.
• AU Small Finance Bank and Kotak Mahindra Bank were the top two stocks with 7% and 4% returns today.
• Experts say that the performance of Indian lenders is improving as more people take out loans in the volatile market.

Banking stocks were at top of their game today, December 5, leading the market sentiment. Several banks have come out with their initial growth numbers for October-December quarter, and it is nothing but positive.

Offering cheap loans during festivals in the last three months increased banks’ loan book for the December quarter. One of the country’s largest banks, HDFC Bank has reported a double digit loan growth of 16%. Not only HDFC Bank, but several other small banks have also witnessed a rise in their loan books.

Bank	Growth in loan book Oct-Dec	Loan book
HDFC Bank	16.4% on year	₹12.60 lakh crore
Bank of Maharashtra	23.02% on year	₹1.29 lakh crore
Federal Bank	12% on year	₹1.43 lakh crore
AU Small Finance Bank	27% on year	₹42,027 crore
Bandhan Bank	11% on year	₹80,255 crore

Banks seem to be getting back on track after being severely affected from the first and second wave of covid.

Analysts believe that the asset quality in the banking system is improving and now the focus will be on loan growth. “With asset quality woes receding, the focus will be shifting towards improving credit growth trends,” said a report by Haitong Securities.

Following the strong growth trend in loans and retail deposits, Morgan Stanley has maintained an ‘overweight’ rating on HDFC Bank stock with a target price of ₹2,050 per share.

ICICI Bank is another stock on top of the list of broking firms as analysts believe shares of the bank provide good entry price to invest after sharp fall in stocks recently.

Banks	% returns in the last 5 days
AU Small Finance Bank	16%
Kotak Mahindra Bank	8%
ICICI Bank	7%
Axis Bank	8%
SBI	8%
Bandhan Bank	6.7%
HDFC Bank	7%
Federal Bank	10%
Punjab National Bank	5%
RBL Bank	-5%

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