India’s banks have recorded a year of robust growth, with increases in Tier 1 capital recorded for all of the country’s 30 biggest banks.
The results are a continuation of the trend of a strengthening Indian banking industry, which has seen the banks overcome issues around non-performing loans and the return of robust capital levels and liquidity buffers. Increased oversight from the regulator in recent years has also helped to improve bank performance.
A significant change recorded this year in the Top 30 Indian Bank ranking is HDFC Bank coming out on top, as it jumps one place to first, thanks to an impressive 50.01 per cent increase in Tier 1 capital. Indeed, it is the biggest increase recorded for an Indian bank this year. The strength of HDFC pushed the government-owned State Bank of India down to second place, despite SBI’s healthy 12.55 per cent increase in Tier 1 capital.
Despite falling one place, SBI still performs strongly across the ranking, having the highest recorded pre-tax profits and taking first place for its assets size. HDFC has seen larger percentage increases in both of these over the past year, as its assets increased by 57.07 per cent, and profits were up by 23.09 per cent, but not enough to overtake that of SBI.
There is no change in the rest of the top five, as ICICI Bank, Axis Bank, and Bank of Baroda hold on to their respective third, fourth and fifth places for another year. While all three enjoyed double-digit growth in Tier 1 capital, it was not enough to affect the rankings.
The second biggest increase in Tier 1 capital was for Karnataka Bank, climbing two places to 24th, with a 31.69 per cent increase, making it the biggest mover in the ranking. The smallest increase was for Yes Bank, which grew 5.77 per cent and fell one place to 14th.
Further down the top 10, Kotak Mahindra Bank held on to sixth and Canara Bank remained in ninth. Interestingly, KMB falls outside the top 10 when it comes to asset size, placing in 11th. It is Indian Bank, which places in 12th in the ranking for Tier 1 capital, which rounds out the top 10 when it comes to assets.
Punjab National Bank, which had been placed seventh in the Top 1000 World Banks 2024 country ranking, has now been ranked eighth place, as additional information came to light following revisions to the bank’s Tier 1 capital with the release of its Pillar 3 disclosure.
However, PNB saw its pre-tax profits increase by a huge 171.66 per cent. Other banks seeing significant increases in pre-tax profits were Axis Bank, which increased 86.01 per cent, and overall 12th placed Indian Bank, which increased 81.83 per cent.
Three banks saw their pre-tax profits fall, with Punjab & Sind Bank recording the biggest decline of 42.95 per cent.
Rounding out the top 10, Bank of India climbed up to 10th from 11th last year, with a 19.42 per cent increase in Tier 1 capital, pushing IndusInd Bank down to 11th, after the bank only saw a 8.55 per cent increase in Tier 1 capital.
Looking at the best-performing banks table, Kotak Mahindra Bank retains its place as the best performing bank in India, with a score of 6.04, despite only taking the top place in the leverage metric. The bank remained in sixth place in the Indian ranking, although it enjoyed a 12.61 per cent increase in Tier 1 capital.
However, there is more movement in the rest of the table. KMB is closely followed by Axis Bank, with a score of 6.03, and a number of first place rankings across the best performing table. The bank, which climbed to second from eighth overall last year, took first place for profitability, return on risk, and soundness. However, it was let down in the liquidity category, where it could only manage eighth place.
Third-placed HDFC also saw some strong results in two metrics, coming first for growth and operational efficiency, but coming tenth for asset quality and liquidity. ICICI Bank fell from second to fourth, placing first for liquidity but 10th for operational efficiency.
Union Bank of India, which was ninth last year, has climbed up to fifth. However, the bank did not take first place in any of the best-performing metrics, with a second place for asset quality its highest score.
PNB climbed one place in the best-performing ranking to ninth, with a fourth place for asset quality being its highest scoring metric.
There is only one new entry in the best-performing top 10, with Bank of India replacing IndusInd Bank, which placed third last year. Bank of India came sixth, although the bank came first in the asset quality metric.
Leave a Reply