Top 10 Private Banks in India

Article sharing options

Indian economy needs a huge and efficient banking system to serve it diversify financial requirement and economic growth. This is done extremely well by the 12 Public sectors and 22 Private Sectors.

But the inefficiencies in the public sector banking is resulting in a great advantage to new and old private sector bank which is also proven by the data (theprint.in).

The market share of public sector bank was 74.28% in 2015 which have gone down to 59.8% in 2020, and that of private sector bank has gone up from 21.26% to 36.04% during the same period. This is the following list of private sector banks in terms of market capitalization. 

1. HDFC Bank 

Promotor Group – HDFC Ltd via different entities & Holding – 25.97%

Leadership.

  • Chairperson – Shyamala Gopinath
  • CEO & Managing Director Sashidhar Jagdishan

Market Capitalization – 816000 crs

  • Revenue =  128552 crs.
  • Cost to Income ratio = 41.55%
  • 5 yrs sales growth = 19.55%  
  • 5 yrs net profit growth = 20.59%

Financial ratio

  • P/E ratio= 25.65%
  • ROE = 15.62%
  • CASA = 46.1%
  • Capital Adequacy Ratio = 18.80%
  • NIM = 3.96%
  • Gross NPA = 1.32%     Net NPA = 0.40%

HDFC Bank is one of the leading private sector banks in India. This bank is also the first company to receive a private bank license from RBI in the year 1994. 

It is also the largest private sector bank by revenue as well as market capitalization. 

HDFC bank is the most consistent bank in terms of growth, net profit, NPA percentage over the years, etc. This company has grown enormously over the years under the guidance of Aditya puri and HDFC Ltd. Go to the HDFC Bank Ltd. website for more information.

2. ICICI Bank

Promotor Group –& Holding – –

Leadership.

  • Non-Executive Part-Time Chairperson- Girish Chandra Chaturvedi
  • CEO & Managing Director Sandeep Bakhshi

Market Capitalization – 436000 crs

  • Revenue =  89162 crs.
  • Cost to Income ratio = 60.99%
  • 5 yrs sales growth = 10.67%  
  • 5 yrs net profit growth = -4.82%

Financial ratio

  • P/E ratio= 22.64%
  • ROE = 14.46%
  • CASA = 46%
  • Capital Adequacy Ratio = 19.12%
  • NIM = 2.95%
  • Gross NPA = 4.96%     Net NPA = 1.14%

ICICI bank also received its universal banking license in the same year as that of  HDFC Bank in the year 1994. In the year 2002, it was merged with other two wholly-owned subsidiaries ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank.

ICICI Bank is one of the most innovative banks in the country they were the first bank to operate in many of the new segments over the years.

The primary objective of the formation of ICICI Bank was to lend medium-term to long-term loans for project financing. Also to lower the cost of funds and earn via transaction fee income. Go to the ICICI Bank Ltd. website for more information.

3. Kotak Mahindra Bank

Promotor Group – Uday Kotak and family  & Holding – 26.02%

Leadership.

  • Chairperson- Prakash Apte
  • CEO & Managing Director – Uday Kotak
  • Joint Managing Director – Dipak Gupta

Market Capitalization – 350000 crs

  • Revenue =  56703 crs.
  • Cost to Income ratio = 59.66%
  • 5 yrs sales growth = 18.59%  
  • 5 yrs net profit growth = 23.06%

Financial ratio

  • P/E ratio= 35%
  • ROE = 11.84%
  • CASA = 60.4%
  • Capital Adequacy Ratio = 22.3%
  • NIM = 4.39%
  • Gross NPA = 3.25%     Net NPA = 1.21%

Kotak Mahindra Finance Ltd. was started in the year 1985 as a bill discounting company by Uday Kotak by raising funds from family and friends. 

Kotak Mahindra Finance Ltd. was the first NBFC (non-banking financial company) to get a commercial banking license in the year 2003 in India. Over the year the bank has partnered with many companies to form different companies in different finance segments. Go to the Kotak Mahindra Bank Ltd. website for more information.

4. Axis Bank

Promotor Group – LIC and other government insurance companies  & Holding – 13.58%

Leadership.

  • Chairperson- Rakesh Makhija
  • CEO & Managing Director Amitabh Chaudhry

Market Capitalization – 225000 crs

  • Revenue =  80847 crs.
  • Cost to Income ratio = 47.82%
  • 5 yrs sales growth = 12.43%  
  • 5 yrs net profit growth = -24.29%

Financial ratio.

  • P/E ratio= 31.3%
  • ROE = 6.94%
  • CASA = 42%
  • Capital Adequacy Ratio = 19.12%
  • NIM = 2.94%
  • Gross NPA = 3.70%     Net NPA = 1.05%

Axis Bank is the private sector bank promoted in the year 1993 and started operations in the year 1994 by the government organization UTI (Unit trust of India) and other government insurance companies like LIC (Life insurance company), General Insurance Corporation of India (GIC), National Insurance Company Ltd., etc. 

Axis bank is the 3rd largest private bank in terms of revenue and a few other matrices. Their initial business came from facilitating services to UTI, but over time they have diversified into different segments and successfully gained market share which has proven to be a great success for the bank. Go to the Axis Bank Ltd. website for more information.

5. Induslnd Bank

Promotor Group – Hinduja Group via different entities  & Holding – 16.60% (36.36% pledged)

Leadership.

  • Chairperson- Arun Tiwari
  • CEO & Managing Director Sumant Kathpalia

Market Capitalization – 76000 crs

  • Revenue =  35500 crs.
  • Cost to Income ratio = 48.16%
  • 5 yrs sales growth = 23.90%  
  • 5 yrs net profit growth = 19.97%

Financial ratio

  • P/E ratio= 26%
  • ROE = 6.73%
  • CASA = 42%
  • Capital Adequacy Ratio = 17.38%
  • NIM = 4.13%
  • Gross NPA = 2.67%     Net NPA = 0.69%

The Induslnd Bank was established in the year 1994 by the Srichand P Hinduja, an NRI head of the Hinduja Group. The name ‘Induslnd’Bank is inspired by the Indus Valley Civilisation – one of the greatest cultural examples of a combination of innovation with sound business and trade practices.

IndusInd Bank is one of the few turnaround stories in the Indian finance sector ever witness. The turnaround was headed by Romesh Sobti and 5 of his colleagues who all came from a foreign bank from 2008. For more information on turnaround go to etnow.com. Go to the Induslnd Bank Ltd. website for more information.

Top 10 Private Bank in India
Top 10 Private Bank in India

6. Bandhan Bank

(Listed in the year 2018)

Promotor Group – Abhijit Ghosh via different entities & Holding – 39.99%

Leadership.

  • Non-Executive Independent Chairperson- Anup Kumar Sinha
  • CEO & Managing Director Chandra Shekhar Ghosh

Market Capitalization – 54000 crs

  • Revenue =  14633 crs.
  • Cost to Income ratio = 51.02%
  • 5 yrs sales growth = Unknown  
  • 5 yrs net profit growth = Unknown

Financial ratio.

  • P/E ratio= 24.50%
  • ROE = 12.66%
  • CASA = 43.4%
  • Capital Adequacy Ratio = 23.5%
  • NIM = 7.8%
  • Gross NPA = 6.8%     Net NPA = 3.5%

The story of his bank is very different than any other bank on this list. Chandra Shekhar Ghosh started Bandhan with a goal to help small traders, who in order to expand their businesses had to take high-interest loans from regional money lenders. So he started a microfinance organization to lend to them small ticket size loans in 1990.

Bandhan started as an NGO then in 2006 Bandhan acquired an NBFC and established Bandhan Financial Services Private Ltd. It was the first microfinance company in India to get a universal banking license in India. Go to the Bandhan Bank Ltd. website for more information.

7. IDFC First Bank

(Merged and commerce operations after Dec. 18, 2018)

Promotor Group – IDFC Ltd & Holding – 39.98%

Leadership.

  • Non-Executive part-time Chairperson- Rajiv B Lall
  • CEO & Managing Director V Vaidyanathan

Market Capitalization – 35800 crs

  • Revenue =  18221 crs.
  • Cost to Income ratio = 50.23%
  • 5 yrs sales growth = Unknown
  • 5 yrs net profit growth = Unknown

Financial ratio.

  • P/E ratio= 74%
  • ROE = 2.69%
  • CASA = 51.75%
  • Capital Adequacy Ratio = 16.32%
  • NIM = 4.98%
  • Gross NPA = 4.15%     Net NPA = 1.86%

IDFC  First bank was formed after the merger of IDFC bank limited and Capital first limited in the year 2018. 

This bank is headed by Mr. Vaidyanathan who had built ICICI Bank’s Retail Banking business from 2000-2009 and was then the MD and CEO of ICICI Prudential Life Insurance Company in 2009-10. 

The goal of this bank is to lend to first-time borrows like salaried people, small business owners, etc. small ticket size loans by using the ace technology. 

To do this they are trying to reduce the high ticket size loan legacy business of the IDFC bank and getting more retail liabilities to lower costs, along with giving loans to new borrows. Go to the IDFC First Bank Ltd. website for more information.

8. Yes Bank

Promotor Group –& Holding – –

  • Non-Executive Chairperson- Sunil Mehta
  • CEO & Managing Director Prashant Kumar

Market Capitalization – 34000 crs

Leadership.

  • Revenue =  23475 crs.
  • Cost to Income ratio = 89.7%
  • 5 yrs sales growth = 23.03% 
  • 5 yrs net profit growth = Negative

Financial ratio.

  • P/E ratio= – 
  • ROE = Negative
  • CASA = 26.1%
  • Capital Adequacy Ratio = 17.5%
  • NIM =1.6%
  • Gross NPA = 15.41%     Net NPA = 5.88%

Yes Bank received its banking license in the year 2004 under the leadership of  Rana Kapoor. Who was later accused of money laundering and was arrested by ED. 

To save this bank and to protect the fall in the banking system SBI (State Bank of India) and other private banks and private investors infused capital. It may as well became turnaround story of India 

9. Federal Bank

Promotor Group –& Holding – –

Leadership.

  • Chairperson- Grace Elizabeth Koshie
  • CEO & Managing Director Shyam Srinivasan

Market Capitalization – 16800 crs

  • Revenue =  16271 crs.
  • Cost to Income ratio = 53.06%
  • 5 yrs sales growth = 13.23% 
  • 5 yrs net profit growth = 18.57%

Financial ratio.

  • P/E ratio = 10%
  • ROE = 12.20%
  • CASA = 33.81%
  • Capital Adequacy Ratio = 14.62%
  • NIM = 3.23%
  • Gross NPA = 3.41%     Net NPA = 1.19%

The history of this company dates back to a per-independence period in 1931. The Bank was incorporated on April 23, 1931, as the Travancore Federal Bank Limited, Nedumpuram under the Travancore Companies Regulation, 1916. 

Late K.P. Hormis, the visionary banker and founder took up the reigns in 1945 and built the bank a nationwide institution. The Bank’s name was changed to The Federal Bank Limited on December 2, 1949. It was among the first banks in India to computerize all its branches.

10. RBL Bank

Promotor Group –& Holding – –

Leadership.

  • Chairperson- Prakash Chandra
  • CEO & Managing Director – Vishwavir Ahuja
  • Executive Director – Rajeev Ahuja

Market Capitalization – 12450 crs

  • Revenue =  10609 crs.
  • Cost to Income ratio = 47.1%
  • 5 yrs sales growth = 35.42% 
  • 5 yrs net profit growth = 25.89%

Financial ratio.

  • P/E ratio = 23.50%
  • ROE = 4.35%
  • CASA = 31.80%
  • Capital Adequacy Ratio = 17.50%
  • NIM = 4.5%
  • Gross NPA = 4.35%     Net NPA = 2.12%

This bank was founded in the year 1943. But the turning point came went Vishwavir Ahuja took over the leadership in the year 2010 of this small, regional, southern Maharashtra based old-age private sector bank. This bank was listed in the year 2016 at a 22% listing premium over the issue price of Rs 225 per share.

Prior to joining Vishwavir Ahuja was a career banker at Bank of America where is headed many senior positions as well as foreign assignment in the USA, Hong Kong, and all four regional offices in India. He was the youngest Managing Director and CEO of Bank of America, India at the age of 41.

After the finance problem of one of the big group in India this bank also faced problems.

Disclaimer

I (financialwizardindia.com) am not a SEBI registered investment advisor. This article is for information purposes any scheme or company name mentioned here is just for example & not a recommendation.

Which private sector bank is best?

HDFC Bank is the best private sector bank almost in all terms such as asset under management, CASA ratio, consistent growth, NPA, etc. for than 2 and 1/2 decades.

2 thoughts on “Top 10 Private Banks in India”

Leave a Comment