ICICI Bank is the Largest Private Sector Bank in India and HDFC Bank is a close second. If you talk to a random stranger on the road, there is a 50-50 chance that he/she has an account with either of these two private sector behemoths. Both ICICI and HDFC Bank are part of the National Stock Indices and are some of the most active stocks in the country. The purpose of this article is to compare these two banks on all possible aspects.
About the Company's:
ICICI Bank is the Second Largest Bank in India and the Largest Private Sector Bank in the country. The bank has a network of 2800+ branches, 10000+ ATMs and has presence in 19 countries. It was founded in the year 1954 and is headed by Ms. Chanda Kochhar (MD & CEO). It offers a variety of financial services like Consumer Banking, Credit Cards, Corporate Banking, Investment Banking, Private Banking, Wealth Management etc. It is one of the members in the 30 stock Sensex and 50 stock Nifty.
HDFC Bank is the Second Largest Private Sector Bank in India and one of the top 5 banks in the country. The bank has a network of 2700+ branches and 10000+ ATMs across India. It also has numerous branches across the globe. It was founded in the year 1994 and is headed by Mr. Aditya Puri (MD). It offers a variety of financial services like Consumer Banking, Credit Cards, Corporate Banking, Investment Banking, Private Banking, Wealth Management etc. It is one of the members in the 30 stock Sensex and 50 stock Nifty.
Shareholding Pattern:
The following table illustrates the % holding of shares of these two companies by the different categories of investors.
| Criteria | ICICI Bank | HDFC Bank |
|---|---|---|
| Indian Promoters Holding (%) | 0 | 23.2 |
| Indian Institutions/Mutual Funds (%) | 26.6 | 10.5 |
| Foreign Institutional Investors (FIIs) (%) | 35.9 | 30.7 |
| ADR & GDR (%) | 26.9 | 17.3 |
| Free Float (Public Holding) (%) | 10.6 | 18.4 |
| Approx No. of shareholders | 7 lakh+ | 4.5 lakh+ |
The following table illustrates the key financial data/numbers for both the banks. As you can see below, both these banks are high profitable and have solid assets and customer base.
| Criteria | ICICI Bank | HDFC Bank |
|---|---|---|
| P/E | 16 | 24.6 |
| P/BV | 2.2 | 5.5 |
| Average Divident Yield (%) | 1.9 | 0.9 |
| Earnings Per Share (EPS) | Rs. 66.3 | Rs. 22.4 |
| Income Per Share | Rs. 329.6 | Rs. 117.6 |
| Book Value Per Share | Rs. 531.6 | Rs. 128.6 |
| Outstanding Shares | 1153 million | 2347 million |
| Average Market Capitalization (Approx) | Rs. 1.02 Lakh Crores | Rs. 1.13 Lakh Crores |
| Number of Employees (Approx) | 58000 | 66000 |
| Profits Before Tax | Rs. 10,866 Crores | Rs. 7,624 Crores |
| Profits After Tax | Rs. 7,643 Crores | Rs. 5,247 Crores |
| Net Profit Margin (%) | 20.1 | 19 |
| Advances/Loans (Approx) | 2.92 Lakh Crores | Rs. 1.98 Lakh Crores |
| Deposits (Approx) | 2.81 Lakh Crores | 2.46 Lakh Crores |
| Credit/Deposit Ratio (%) | 103.6 | 80.7 |
| Net Fixed Assets (Approx) | Rs. 5,432 Crores | Rs. 2,378 Crores |
| Total Assets (Approx) | Rs. 6 lakh Crores | Rs. 3.4 lakh Crores |
| Debt/Equity Ratio | 7.2 | 9 |
| Net NPA's (%) | 0.007 | 0.002 |
Terms Used in this Article That you may not remember immediately:
ADR – American Depository Receipts
GDR – Global Depository Receipts
ADR & GDR are used by private organizations to raise funds from foreign investors.
P/E – Price to Earnings Ratio
P/BV – Price to Book Value
EPS – Earnings Per Share
P/E, P/BV, EPS etc are all Market Ratios that are used to gauge the financial health of a company. They were covered in one of our earlier article titled “Market Ratios”. You can revisit the article and learn more about them by Clicking Here
NPA – Non Performing Asset. This is the % of loan money the bank has disbursed but isn’t being repaid by the borrowers. Simply put – this refers to Bad or Defaulted Loans.
Hope you found this article useful. If you wanna see more comparisons, leave a comment in this article or in our facebook page and I will try to do the comparisons…
Disclaimer: All the details above were taken from the respective company websites and other financial websites in the Internet. I have just collated the requisite info in one place and cannot guarantee on the accuracy of the same.
An important parameter for measuring the performance of a bank is NIM (Net interest margin). HDFC NIM is 4.2% and ICICI is 3%.
ReplyDeleteNIM is the difference between (interest earned - interest expenses)/ Avg Earning assets.
Thanks for the good update Anil.
DeleteAnand
So which one is good pick for long term?
ReplyDeleteMadhu - That would depend on numerous factors and a generalized advise may result in losses for you. At a high level, both stocks are good and can be prospective investment options for long term.
DeleteI personally like ICICI for there flexibility. HDFC charges 100 rupees if we deposit from differnt branch and if 3rd person deposit and they never honor my check's for a minor mistake, we all know we cant sign exactly everytime, it could be strict measure but that sucks, there are 1000's of method to identify the person. HDFC got tuff situation because of there policy.
ReplyDeleteHi,
ReplyDeleteKindly let me know either of ICICI or HDFC which bank is good for holding as salary account. What would be the opinions.
Aravind - I do not provide customized financial advise through the blog comments section. You can talk to representatives from either bank who come to your office to offer salary accounts and compare their services. In my experience both are very good.
DeleteHi,
ReplyDeleteKindly let me know in which bank(either HDFC or ICICI) is better to hold our salary account
Arvind - Both are good banks and you choose either. Their service levels are similar, products offered are very comparable and hence, there is not much difference
DeleteDon't open a account with ICICI very bad service, poor response and non-responsive to any requests
ReplyDeletewould you be kind to temme wic banks gives highest int on saving acc ..plsss
ReplyDeleteSee this: http://anandvijayakumar.blogspot.sg/2011/11/awesome-news-for-savings-account.html
Delete