Bank Nifty has underperformed Nifty in last 2 years in a row

Over the last two years, Bank NIFTY has consistently underperformed the broader NSE NIFTY50 index. While Bank NIFTY surged in CY22, outperforming NIFTY, its performance over the past six years has been weaker—NIFTY gained 117.7% compared to Bank NIFTY’s 87.6%. In the last five years, Bank NIFTY has underperformed NIFTY four times. This trend continued in CY24, with both indices delivering single-digit returns for the first time in a decade.

Return, %	NIFTY	NIFTY Bank
CY2019	12.0	18.4
CY2020	14.9	–2.8
CY2021	24.1	13.5
CY2022	4.3	21.2
CY2023	20.0	12.3
CY2024	8.8	5.5

Over the past six years, several prominent banks have faced significant challenges, delivering negative returns on a cumulative and year-on-year basis. RBL Bank, Bandhan Bank, DCB Bank, IndusInd Bank, YES Bank, and Bank of India have all seen their stock prices decline over this period, reflecting broader sectoral struggles and specific institutional challenges.

Banks	1 year, %	6 years, %
YES Bank	–9.3	–89.3
RBL Bank	–44.0	–72.8
Bandhan Bank	–34.7	–71.3
IndusInd Bank	–40.4	–40.4
DCB Bank	–9.1	–28.6
BOI	–10.9	–3.6

Year-on-year (YoY), the banking sector has witnessed significant declines, with RBL Bank experiencing the steepest fall in stock value, followed by IndusInd Bank, Bandhan Bank, and IDFC First Bank. All of these banks have posted negative returns in the range of approximately 30% to 44%.

Banks	1 year, %
RBL Bank	–44.0
Indusind Bank	–40.4
Bandhan Bank	–34.7
IDFC First Bank	–29.5
CSB Bank	–23.6
J&K Bank	–19.0
BOI	–10.9
YES Bank	–9.3
DCB Bank	–9.1
Kotak Mah Bank	–7.8
Axis Bank	–2.3

On a YoY basis, the best-performing banks have been Karur Vysya Bank, ICICI Bank, Federal Bank, Indian Bank, and State Bank of India (SBI), all of which have delivered returns of 23% or more.

Banks	YOY, %
Karur Vysya Bank	29.2
ICICI Bank	28.9
Federal Bank	25.9
Indian Bank	25.4
SBI	23.4
BOMH	14.6
Canara Bank	13.5
IDBI Bank	12.5

Over the last six years, NIFTY has posted a strong gain of 117.7%, rising from 10,862.55 to 23,644.9 points. In comparison, Bank NIFTY has underperformed, rising 87.6% from 27,160.2 to 50,952.75 points.

While both indices have shown substantial growth, NIFTY’s broader market performance has far outpaced the banking sector’s gains.

Banks, %	Price Returns, CAGR, 6 years	Bank Nifty
YES Bank	–89.3	87.6
RBL Bank	–72.8	87.6
Bandhan Bank	–71.3	87.6
IndusInd Bank	–40.4	87.6
DCB Bank	–28.6	87.6
BOI	–0.6	87.6
IDBI Bank	23.8	87.6
PNB	30.1	87.6
Union Bank of India	38.7	87.6
Kotak Mah Bank	40.0	87.6
CSB Bank	42.4	87.6
IDFC First Bank	44.6	87.6
HDFC Bank	67.4	87.6
Axis Bank	71.5	87.6
Canara Bank	80.6	87.6
Bank of Baroda	101.5	87.6
Federal Bank	110.9	87.6
Indian Bank	116.6	87.6
Karur Vysya Bank	142.5	87.6
J&K Bank	164.2	87.6
SBI	167.8	87.6
Bank of Maharashtra	247.1	87.6
ICICI Bank	256.5	87.6