Top Bank Stocks in India – Public and Private Sector

Banking sector has been the backbone of the economy which also goes through its own phases of ups and downs, while everything in the economy is rosy, lending and borrowings boom and this in turn leads to healthy growth in banks, but when going gets tough, defaults rise and this leads to increase in bad assets (bad loans), whereas last year, Prime Minister Narendra Modi has set a USD 5Tn economy target for India which is to be achieved within the next five years, but however taking into consideration various challenges due to lockdowns & economic slowdown, credit from banks must grow close towards 12% every year in order to at least aim for a USD 5 trillion economy figure by 2024, and these banking players have always remained resilient, growing consistently through multiple economic cycles in order to capitalize on every opportunity, while considering an investment in financials especially in the banking space, utmost importance is placed on management’s understanding of resilient growth-risk matrix, and a bank should ideally be cherry-picked on the sheer balance between garnering market share and not distorting the risk matrix in place in order to chase market share, while one should carefully look at the banking players keeping in mind the fundamental historical performance of these banking players and those players that have managed to show certain degree of predictability in their financial performance, and investors should consider growth in profitability, color and growth of advances and deposits along with adequate buffer capital and trend of non-performing asset and NIM while investing in banks, hence one should carefully choose to look at banks with matrix such as the emergence of low net NPA (i.e. between 0.30%-2%) over the years, strong CASA ratio (current account and savings account ratio) which is above 40%, have sufficient capital buffer in terms of CRAR constantly well above RBI standards of 9%, consistent and robust net interest margins (i.e. above 3%) along with consistent growth in advances as well as deposits (nearly above 10-20% YoY growth).

Top Bank Stocks in India- Public Sector

  • State Bank of India

It is an India-based banking and financial services company, and the Company’s segments include Treasury, Corporate/Wholesale Banking, Retail Banking and Insurance Business, while the Treasury segment includes the entire investment portfolio and trading in foreign exchange contracts and derivative contracts, whereas the Corporate/Wholesale Banking segment comprises the lending activities of corporate accounts group, commercial client’s group and stressed assets resolution group, whereas the Retail Banking segment comprises retail branches, which primarily includes personal banking activities, including lending activities to corporate customers, and also includes agency business and automated teller machines (ATMs), and the Insurance Business segment comprises the results of SBI Life Insurance Co. Ltd. and SBI General Insurance Co. Ltd, while it is involved in providing a range of products and services to individuals, commercial enterprises, large corporates, public bodies and institutional customers.

  • Market Cap= ₹ 478,984 Cr.
  • Current Price- ₹ 537
  • High / Low- ₹ 549 / 425
  • Stock P/E- 11.8
  • Book Value- ₹ 342
  • Dividend Yield- 1.32 %
  • ROCE- 4.44 %
  • ROE- 12.2 %
  • Face Value- ₹ 1.00
  • Bank of Baroda Ltd

It is engaged in providing banking and financial services in India, while its segments include Treasury, Corporate / Wholesale Banking, Retail Banking, and Other Banking Operations, while its geographical segment includes Domestic Operations and Foreign Operations, it also offers personal banking services, which include savings accounts, current accounts, and term deposits, while it also provides a range of digital products, which includes instant banking, such as Internet banking, mobile banking, cards, WhatsApp banking, digital signage systems, self-service passbook printers, and automated teller machines (ATMs), whereas it offers a range of loans, such as home loan, personal loan, vehicle loan, fintech, education loan, and gold loan, and it provides merchant payment solutions, DigiNext Cash Management Services, INSTA SmartTrade, Bharat Bill Pay, Bhim Adhaar Pay and Internet Payment Gateway, and to be able to provide these services it has 8,185 branches and 11,535 ATMs and cash recyclers supported by self-service channels

  • Market Cap- ₹ 67,822 Cr.
  • Current Price- ₹ 131
  • High / Low- ₹ 135 / 76.7
  • Stock P/E- 7.88
  • Book Value- ₹ 178
  • Dividend Yield- 2.17 %
  • ROCE- 4.02 %
  • ROE- 9.00 %
  • Face Value- ₹ 2.00
  • Punjab National Bank

It is an India-based bank, and the Bank’s segments include Treasury, Corporate/Wholesale banking, Retail banking, and Other banking operations, whereas the Treasury segment includes the entire investment portfolio and trading in foreign exchange contracts and derivative contracts, whereas the Bank provides various banking services, such as agriculture banking, retail banking, treasury operations, corporate banking, merchant banking, non-resident Indian (NRI) services, depository services, digital banking services, and mutual funds, and its depositary services include current deposits, savings deposits, term deposits, recurring deposits, Capital Gain Account Scheme and Gold Monetization Scheme, while its loan portfolio includes retail loans, agriculture loans, micro, small and medium enterprises (MSME) loans and corporate loans, and its other services include cash management services, export/import finance, gold card scheme for exporters, doorstep banking service & online trading.

  • Market Cap- ₹ 38,814 Cr.
  • Current Price- ₹ 35.2
  • High / Low- ₹ 48.2 / 28.0
  • Stock P/E- 13.1
  • Book Value- ₹ 88.6
  • Dividend Yield- 1.82 %
  • ROCE- 4.02 %
  • ROE- 4.05 %
  • Face Value- ₹ 2.00

Top Bank Stocks in India- Private Sector

  • Housing Development Finance Corporation Ltd

It is an India-based holding company that is primarily engaged in providing finance to individuals, corporates, and developers for the purchase, construction, development, and repair of houses, apartments, and commercial properties, while the Company’s segments include loans, life insurance, general insurance and asset management, whereas the Company offers a range of insurance products, including motor, health, travel, home and personal accident in the retail division, and it has customized products, such as property, marine, aviation, cyber security, and liability insurance in the corporate division and crop insurance, whereas to provide all these services the Company operates approximately 387 branches and service centers.

  • Market Cap- ₹ 826,813 Cr.
  • Current Price- ₹ 1,486
  • High / Low- ₹ 1,725 / 1,272
  • Stock P/E- 20.8
  • Book Value- ₹ 446
  • Dividend Yield- 1.04 %
  • ROCE- 5.83 %
  • ROE- 16.6 %
  • Face Value- ₹ 1.00
  • ICICI Bank Ltd

It is a banking company, and the Bank is engaged in providing a range of banking and financial services including commercial banking and treasury operations, while the Bank’s business segments include Retail Banking, Wholesale Banking, Treasury, and Other Banking, whereas the Bank provides a range of products, which includes savings account, women’s account, senior citizen account, current accounts, credit cards, home loan, personal loan, car loan, gold loan, recurring deposit, life insurance, and general insurance, it provides a range of Internet banking services, which includes pay bills, raise service request,& make transfers, and it also offers a range of mobile banking services, which includes iMobile Pay, short message service (SMS) banking, Call to Pay, and immediate payment service (IMPS), whereas its general insurance products are health insurance, travel insurance, home insurance, two wheeler insurance, and car insurance.

  • Market Cap- ₹ 607,457 Cr.
  • Current Price- ₹ 872
  • High / Low₹ 891 / 642
  • Stock P/E- 21.9
  • Book Value- ₹ 262
  • Dividend Yield- 0.57 %
  • ROCE- 5.59 %
  • ROE- 14.8 %
  • Face Value- ₹ 2.00
  • Kotak Mahindra Bank Ltd

It is an India-based bank, and the Bank provides a range of banking services to its customers encompassing retail banking, treasury, and corporate banking in India and also has a representative office in Dubai, while its segments include Corporate / Wholesale Banking, Retail Banking, Treasury, BMU and Corporate Centre, and Other Banking business, whereas the Corporate / Wholesale Banking segment includes wholesale borrowings and lending’s and other related services to the corporate sector, which are not included under retail banking, and the Retail Banking segment includes lending, branch banking, and credit cards, whereas the Treasury, BMU and Corporate Centre segment includes money market, forex market, derivatives, investments and primary dealership of government securities and balance sheet management unit (BMU) for asset liability management and corporate center, which primarily consists of support functions, and the Other Banking business segment includes other businesses.

  • Market Cap- ₹ 381,015 Cr.
  • Current Price- ₹ 1,919
  • High / Low- ₹ 2,253 / 1,630
  • Stock P/E- 29.2
  • Book Value- ₹ 487
  • Dividend Yield- 0.06 %
  • ROCE- 6.29 %
  • ROE- 13.3 %
  • Face Value- ₹ 5.00

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