At the same time, the brokerage has downgraded Union Bank of India to ‘Neutral’ from ‘Buy’ with a price target of ₹195. It has also downgraded Bank of India to ‘Neutral’ from ‘Buy’, assigning a target price of ₹160.
BofA said the recent correction in banking stocks appears overdone, with value emerging, particularly in large banks. It has turned more constructive on the segment, citing the current macro outlook and attractive valuations.
The brokerage, however, cautioned that a prolonged geopolitical conflict could impact earnings by 3-23%.
On PSU banks, BofA highlighted healthy growth prospects and potential upside to net interest margins, but cited risks from lower non-interest income and asset quality.
Shares of SBI, Union Bank of India, and Bank of India are trading with losses of up to 3% today.
