Growing investor interest in older private banks

Sustaining home ground growth, strengthening underwriting skills favour City Union, regional lenders

A year ago, the stocks of regional private banks, also referred to as old-generation private banks, had second-rung preference. One refers to the South India-based lenders from yore — City Union Bank (CUB), Federal Bank, Karur Vysya Bank (KVB), Lakshmi Vilas Bank (LVB) and South Indian Bank (SIB).

A lot seems to have changed since. Data indicate both home and foreign institutional investors have raised stakes in most of these over recent quarters, taking advantage of the benign valuations. Strengthening of fundamentals also played a part. Analysts say with the prospects of these banks remaining healthy, investors could consider accumulating