HDFC Bank has overthrown ICICI Bank en route towards becoming the biggest private bank in the country by way of standalone assets. Total assets stood at Rs.7.87 lakh crore for ICICI Bank as of September, 2017. HDFC Bank notched up assets of Rs.9.33 lakh crore as of September, 2017, which is around 19% higher as compared to ICICI Bank. The difference in standalone assets has been increasing over quite a few quarters. ICICI Bank has stated that it is larger based on parameters like subsidiary businesses such as home finance and mutual funds. ICICI Bank has officially stated that it is the country’s biggest lender in the private sector by way of consolidated assets. On the 30th of September, 2017, the total consolidated assets stood at Rs.10.23 lakh crore.
ICICI Bank also has majority stakes in several financial services divisions including fixed income, asset management, insurance and securities brokerage. These businesses are major leaders in their sectors in India. With IndAS being introduced from the FY2019 onwards, businesses ought to be considered on a consolidated basis according to ICICI Bank officials. However, some experts feel that standalone assets and not consolidated assets, should be the parameter by which to compare two behemoths since this will be a fair system. ICICI Bank has witnessed a rise in volumes of bad loans over the last couple of years, necessitating higher amounts to cover these. Profitability has also been impacted and the asset base has not increased hugely as well.
The gross NPAs were 7.87% of total gross advances by September, 2017. This has impacted net profit by 30% as it slumped to Rs.2,071.38 crore from Rs.2,979 crore one year earlier. ICICI Bank is currently focusing on the domestic businesses and has been trying to reduce the overall global business. HDFC Bank has managed to restrict bad loans and its gross NPAs were 1.26% of total gross advances by September, 2017. HDFC Bank has also focused on the retail loan segment at a time when corporate borrowing (a strong business generator for ICICI Bank) has been affected badly. However, credit cards, auto and personal loans continue to witness strong growth and this has boosted HDFC Bank’s overall progress.
Most banks have witnessed a sluggish environment as far as corporate loans are concerned. There is minimal demand in this segment across most financial institutions according to experts. HDFC Bank has a primary focus on the retail sector and working capital loans. This makes it better equipped to grow faster over the next 2-3 years. HDFC Bank also earned the distinction of being included in the too big to fail category of the Reserve Bank of India. ICICI Bank is already a member of this category along with the State Bank of India. HDFC Bank has also achieved the milestone of being the most valuable Indian lender with its market capitalization touching Rs.4.73 lakh crore as of the 3rd of November, 2017.