PSU Bank Shares Dip on Social Media Merger Speculation; UCO Bank Denies Discussions

18 Dec 2023 , 11:55 AM

PSU bank shares faced pressure on December 18 due to social media speculation on possible mergers. Nifty PSU bank index surged by 2.4% on December 15 following a widely shared government document.

Benchmark Bank Nifty closed with a 0.9% gain on the same day. Social media document hinted at parliamentary committee discussions in early January regarding mergers but was later ‘revised’ with no mention of mergers.

UCO Bank official clarified that the document was misconstrued, terming it speculation with no ongoing merger discussions.

On December 18, Bank of Maharashtra shares fell 1.3%, Union Bank of India dropped nearly 4%, Bank of India slipped 0.8%, while UCO Bank traded mildly in the green.

PSU Bank index surged over 13% in the past month, outperforming Nifty (up 9%) and Nifty Bank (up 10.5%).

In 2019, the government announced a reduction of 27 public sector banks to half through multiple mergers. The last round of consolidation in April 2020 saw 10 PSBs merging into four entities, with UCO Bank, Bank of Maharashtra, and Bank of India not part of the merger plan.

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