Top 5 Banks in India by Market Capitalisation 2023

The banking landscape in India is undergoing a major transformation, and it's generating quite a buzz! Thanks to cool schemes like the Pradhan Mantri Jan Dhan Yojana and the rise of India Post Payment Banks, it's becoming simpler for people to manage their finances. But wait, there's more!

By 2025, India's Fintech party is expected to be worth US$150 billion, which is ₹12,30,000 crore. That's right, we're talking big bucks here! In fact, India is strutting its stuff as the third-largest Fintech hub on the planet. It's like the hippest nightclub where everyone wants to be.

Over 2,000 super trendy Financial Technology (FinTech) businesses are already making waves in India, and they're multiplying faster than rabbits. 🐇😂

What's their magic trick? Well, India has got it all– from flashy infrastructure investments and government policies that say, "Go for it!" to people raking in more dough and going on shopping sprees like never before. 

Oh, and let's not forget the digital lending revolution. From ₹7,38,000 crore in 2020, it's set to rise to ₹65,60,000 crore by 2030. That's like going from a cosy little campfire to a full-blown bonfire! 🫢

Are you curious to see the infographic spilling the beans on India's Digital Lending Forecast? Scroll on! 🚀📈

The banking industry is thriving, with a surging demand sweeping across India. 

Moving on to discovering the top 5 banks in India for 2023.

1. HDFC Bank

At the top of the list is HDFC Bank, worth ₹11,68,357.85 crore in the stock market. It is one of India's top private banks and got the green light from the Reserve Bank of India (RBI) back in 1994 to become a private sector bank. The HDFC Bank mainly focuses on three areas: Wholesale Banking, Treasury, and Retail Banking.

Let's break down HDFC Bank's key financial pointers in a straightforward way:

Revenue Growth: In the latest financial year, HDFC Bank made ₹1,70,754.05 crore in revenue. Impressively, over the past three years, it has seen revenue grow by 11.80%. That's like steadily earning more money each year!

Loan Growth: The bank's loans to customers grew by 16.96% year-on-year. Over three years, it's a solid 16.78% growth. It means more people are borrowing from HDFC Bank.

Current and Savings Accounts (CASA) Ratio: Currently, 44.37% of the bank's funds come from CASA. It signifies a lot of stable funds in your savings account, which is good for the bank.

Cost of Liability: The bank's overall cost of borrowing money is 3.64%. That's how much it  pays to attract deposits. Lower borrowing cost is better for it as it means more profit for the bank.

Return on Assets (ROA): HDFC Bank is doing well here with an ROA of 1.98%. You can say that for every ₹100 they have in assets, it makes ₹1.98 in profit.

Non-Performing Assets (NPA): The bank is doing exceptionally well in managing bad loans. Both Gross NPA and Net NPA are at 0%. It's like having no bad loans at all!

Provisioning Coverage Ratio: The bank reduced its provisions for bad loans by -22.71%. It means it sets aside less money for potential losses. 

Non-Interest Income: HDFC Bank earned ₹33,912.05 crore from sources other than interest. This indicates that it has  an extra source of income, just like you do alongside your regular job! 😉

Price-to-Book Ratio: Currently, HDFC Bank's stock is trading at a P/B ratio of 3.80. This ratio tells us how the market values the bank. Historically, it's been 3.43, so it's trading at a slightly higher value.

Summary of performance: HDFC Bank is doing well in terms of revenue growth, managing its loans, and keeping bad loans at bay.  And the P/B ratio suggests that the market has a positive view of the bank's prospects. However, its low Capital Adequacy Ratio might need attention.

2. ICICI Bank

ICICI Bank is valued at ₹6,60,971.80 crore. It traces its roots back to 1955 when it was founded with the support of the World Bank, the Indian government, and local industry leaders. In 1994, it officially emerged under the promotion of ICICI Limited. 

This bank offers a wide array of financial services, including deposits, loans, and various tools for managing finances, catering to both individual and business needs. Beyond its strong presence in India, ICICI Bank extends its services globally, ensuring it meets the diverse financial requirements of its clients across borders.

Let's dive into ICICI Bank's financial performance in a clear and simple way:

Revenue Growth: In the latest financial year, ICICI Bank earned ₹1,21,066.81 crore in revenue. Over the past three years, revenue has grown by a solid 12.59%.

Loan Growth: ICICI Bank reported a 17.77% year-on-year increase in loans. Over three years, the growth stands at 15.35%. 

CASA Ratio: Currently, 45.48% of the bank's funds come from CASA. 

Cost of Liability: The bank's overall cost of borrowing money is 3.61%. 

Return on Assets: ICICI Bank has a healthy ROA of 1.86%.

Non-Performing Assets: The bank is doing exceptionally well in managing bad loans, with Gross NPA and Net NPA at 0%.

Provisioning Coverage Ratio: The bank reduced its provisions for bad loans by -22.69%.

Non-Interest Income: ICICI Bank earned ₹65,111.99 crore from sources other than interest. This additional income helps the bank without taking on extra risk.

Price-to-Book ratio: ICICI Bank's stock is currently trading at a P/B ratio of 2.98. Historically, it's been 2.48.

Summary of performance: 

ICICI Bank is experiencing growth in revenue and loans, maintaining low bad loans, and earning additional income from non-interest sources. However, its capital adequacy ratio and P/B ratio are points to watch for its financial health and market valuation.

3. State Bank of India

Now, let's shine the spotlight on the third-place holder, one of India's most beloved public banks. SBI boasts a market capitalisation of ₹5,31,148.27 crore. The roots of the State Bank of India trace back to the early 1800s, with the establishment of the Bank of Calcutta in 1806, right in the heart of Calcutta, now Kolkata.

Fast forward to today, and you've got the State Bank of India, an Indian multinational powerhouse in the public sector banking and financial services arena. Oh, but what makes it truly special is its dedication to the common folks and, of course, those lunch breaks! 😂

Coming to the financial performance of SBI:

Impressive Earnings: In the latest financial year, with a revenue growth of 9.14% over the last 3 years, SBI raked in ₹3,50,844.58 crore of revenue.

Loan Growth: SBI reported a 16.96% year-on-year rise in advances, translating to a solid 11.24% growth in loans over the past three years. It's like they're handing out loans left and right! 

CASA Ratio: At present, 42.67% of the bank's funds come from Current and Savings Accounts (CASA). 

Cost of Liability: The bank's overall cost of borrowing money stands at 3.81%.

Return on Assets: SBI has an average ROA of 1.00%. 

Non-Performing Assets: It is doing remarkably well in managing bad loans, with Gross NPA and Net NPA at 0%.

Provisioning Coverage Ratio: The bank has decreased its provisions for bad loans by -31.84% year-on-year. 

Non-Interest Income: SBI's non-interest income, which doesn't involve any extra risk, has surged to ₹1,22,533.56 crore.

P/B Ratio (Price-to-Book): Its stock is trading at a P/B ratio of 1.52. 

4. Kotak Mahindra Bank

Let's meet the second-to-last bank on our list: Kotak Mahindra Bank, flaunting a market capitalisation of ₹3,46,877.58 crore. The Kotak Mahindra group has long been a shining star in India's financial galaxy, earning a sterling reputation.

Kotak Mahindra Bank is not just any bank; it's one of the fastest-growing and most admired financial institutions in India. 

Kotak Mahindra Bank is like your all-in-one store for banking and finance things. It doesn't matter if you're a big-shot businessperson or just an ordinary person; they have something for everyone. And the best part? It is not limited to regular banking. Nope, it's into everything, from helping you with your money to dealing with big business stuff, insuring your life, and even managing your wealth.

Let's dive into the performance of Kotak Mahindra Bank: 

Revenue: In the latest financial year, Kotak Mahindra Bank earned a substantial ₹42,151.06 crore in revenue. Over the past three years, it has seen a steady revenue growth of 7.99%. 

Loan Growth: The bank reported an impressive 17.94% year-on-year increase in advances, leading to a solid 12.85% growth in loans over the past three years. 

CASA Ratio: It is currently at 52.78%.

Cost of Liability: The bank's overall cost of borrowing money stands at 3.45%. 

ROA: Kotak Mahindra Bank has an ROA of 2.53%. 

Provisioning Coverage Ratio: The bank reduced its provisions for bad loans by -42.94% year-on-year, suggesting improved loan quality.

Non-Interest Income: Kotak Mahindra Bank's non-interest income, which doesn't involve extra risk, has surged to ₹25,990.97 crore. 

P/B Ratio: Kotak Mahindra Bank's stock is trading at a P/B ratio of 2.97. Historically, it's been 3.79, indicating a slightly lower valuation compared to the past.

5. Axis Bank

The final contender on our list: Axis Bank has a market capitalisation of ₹3,09,112.21 crore. Axis Bank isn't your average bank; it's one of the pioneers among the new generation of private sector banks, setting sail in 1994.

Axis Bank covers the entire financial spectrum, offering a wide range of services to various customer segments.

Let's dig into the financials of Axis Bank:

Impressive Earnings: Axis Bank raked in ₹87,448.37 crore in revenue. Over the past three years, it has seen the revenue grow by a solid 11.13%. 

Loan Growth: The bank reported a 19.72% year-on-year increase in advances, translating to a robust 14.21% growth in loans over the past three years. 

CASA Ratio: Currently, 47.12% of the bank's funds come from CASA.

Cost of Liability: The bank's overall cost of borrowing money stands at 3.77%. 

ROA: Axis Bank boasts an average ROA of 0.85%. 

Provisioning Coverage Ratio: The bank has reduced its provisions for bad loans by -60.78% year-on-year, indicating improved loan quality.

Non-Interest Income: Axis Bank's non-interest income surged to ₹18,706.38 crore. 

P/B Ratio: Axis Bank's stock is trading at a P/B ratio of 2.28.

The Bottom Line

India's banking sector is booming, fueled by Fintech innovation and government initiatives. The top 5 banks in 2023 are doing pretty well. 

Each bank has its unique strengths. HDFC Bank, with its robust revenue and loan growth, stands out. ICICI Bank impresses with its global reach and steady financial performance. State Bank of India continues to be the people's bank of choice. Kotak Mahindra Bank offers a diverse range of financial services. Axis Bank, a pioneer in the private sector, is making waves. 

And that's a wrap for today's article! But guess what? If you're hungry for more insights into Banking stocks and want to uncover the secrets of CASA Ratio, NPA, and CAR, then don't miss out on our Master Class 7.

Here's the question: Which bank do you think is the real game-changer, and where would you put your money? 🤔💰