Dramatic change is underway in India's private banking industry as ICICI Bank edges past HDFC Bank on all major financial parameters, paving the way for a potential new sector leader.
Principal Highlights:
-
Profit & Margins: ICICI Bank posted a strong 15% profit increase for FY25, beating HDFC Bank's 11%. Its net interest margin (NIM) is a whopping 4.41% compared to HDFC's 3.65%.
-
Growth & Efficiency: ICICI Bank’s advances and deposits both grew 14%, while HDFC’s loan growth lagged behind its deposit growth, impacted by post-merger adjustments. ICICI’s return on equity (ROE) is 17.4% compared to HDFC’s 14.39%.
-
Market Momentum: Investors have noticed—ICICI’s stock returned 31% over the past year, outshining HDFC’s 24%. Brokerages are bullish on ICICI, citing its superior execution and asset quality.
-
HDFC's Challenge: HDFC's giant-merger has stretched its loan-to-deposit ratio and margins in the short run, and analysts hope for benefits to show up in the next 6–8 quarters.
Outlook:
ICICI Bank's growth focus, efficiency, and risk management have pushed it to the top, but competition is by no means over as HDFC Bank tries to regain its momentum.
Source: Economic Times, Financial Express, Reuters