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HDFC Bank clocks better results than ICICI Bank and Axis Bank

A Moneylife research compares three banks and finds out that HDFC Bank has come out at the top while Axis Bank has more work to do to get ahead of its key rivals

A comparison between Axis Bank, HDFC Bank and ICICI Bank shows that Axis Bank leaves a lot to be desired while HDFC Bank has trumped both Axis Bank and ICICI Bank. The table below shows the comparison of the three banks, using key parameters. The green bars indicate the best in that category, while red indicates the opposite. 

Axis Bank’s loan growth was slower than HDFC Bank, at 19% growth (Rs1,69,760 crore). ICICI Bank recorded the slowest credit growth, clocking only an increase of 17% (total advances at Rs2,53,728 crore) partly because it has the largest  advances portfolio. From the table above we see that HDFC Bank is the healthiest of the lot, topping in three out of five categories, while Axis Bank was worse in four out of five categories.

HDFC on the other hand recorded the highest Current Account-Savings Account (CASA) ratio (48.4%) indicating that it continues to find ways to access low cost funds to ramp up its growth. Due to higher CASA ratio and a robust 22% increase in advances, it had consolidated net profit of Rs5247, which is higher by 31.4% over last year. It also had a higher net interest margin (for the March 2012 quarter) of 4.2%, compared with 3.55% and 3.01% for Axis Bank and ICICI Bank, respectively. Net interest margin is the difference between interest earned and interest expended and is considered a key measure of a bank’s profitability. Only ICICI had highest net profit (Rs7,643 crore) than the other two, but it came at an expense of higher bad debts.

ICICI Bank had the highest Net Non-Performing Assets (NNPA) of 0.62% compared with just 0.25% and 0.20% for Axis Bank and HDFC Bank, respectively. Despite this, its Capital Adequacy Ratio (CAR) was a healthy 18.52%, compared to a measly 13.66% for Axis Bank and 16.5% for HDFC Bank.

It is interesting to note that Axis Bank’s bottomline was boosted by a 153% rise in trading profits, signifying increased risk taken to earn profits. Indeed, despite this, Axis’ profits would have stagnated but for a 10% decline in provisions, from Rs1,280 crore to Rs1,143  crore which helped the bank’s bottomline. However, fees—the jam for a bank—has increased by 25% year-on-year, to Rs4,727 crore. On the other hand, ICICI Bank’s fee income had declined from Rs6,707 crore in FY10-11 to Rs6,419 crore in FY12, a decline of over 4%. While HDFC Bank’s fees are not known from the latest filings, its “non-interest” (or “other income”) income stood at Rs5,243 crore, up 21% year-on-year.

Axis Bank restructured loans on its books stood at Rs3,060 crore, much of it from large and mid-sized companies (79% of restructured assets). It also provided for higher provision coverage ratio of 80.91%, higher than ICICI (80.4%), but lower than HDFC Bank (82.4%). ICICI Bank’s net restructured assets stood at Rs4,256 crore which is higher than Axis Bank thanks to its larger base. In HDFC Bank’s case, the quantum of restructured assets stood at 0.4% of the gross advances.

The banking industry is perceived to be going through difficult times due to low credit off-take in face of high interest rates and inflation. However, this perception could be incorrect given the extremely robust performance of HDFC Bank and ICICI Bank. The message from Axis’ performance is less clear since it is undergoing a transformation under the current CEO.
 

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COMMENTS

R KRISHNAN

5 years ago

Service level of all the banks are bad.Having dealt with many banks, service wise I think HDFC Bank is best among the worst. They at least
respond and take some steps to redress the problem.

Govind Shanbhag

5 years ago

Respected Shri Kumar Jee- I am extremely sorry I beg to differ from your views regarding HDFC bank. I have been visting all the three bank branches in Borivali -Mumbai and also other places. Customer service, body language of the officials, waiting time at the bank, courtesy I rate HDFC as the best. Axis used to be best, now they have started drifting like ICICI who were the victim of mass banking. Even in mutual funds, HDFC have scored better.

REPLY

Deepak R Khemani

In Reply to Govind Shanbhag 5 years ago

I'm sure you will get people who have different experiences with different banks, so an individual having a bitter experience with a branch of a particular bank is possible, I agree with you that Axis is now going the ICICI way after the wholesale import of top people who shifted from ICICI to AXIS.

R Nandy

In Reply to Deepak R Khemani 5 years ago

I am customer of both HDFC bank as well as ICICI Bank.My experience has been mixed with both of them.But,IMO HDFC has more robust systems and processes.They give higher importance to security. e.g Intenet Banking doesn't give NEFT/bill pay facility by default. ICICI also has major Internet banking security issues with phising/vishing
attacks.I can't elaborate on it here,but they seem to have major organizational lacunae with employee involvement due to which
these things happen.ICICI has massive online complaints for Netbanking fraud compared to HDFC.

HDFC also has higher accountability for customer service.Call back from Bank in case a call is disconnected in between.On the
contrary, I have experienced ICICI call centre agents disconnecting themselves.

KUMAR

5 years ago

HDFC BANK DOES LOT OF COVERT THINGS WHICH CUSTOMERS ARE UNAWARE OF & ARE TAKEN FOR A RIDE.
THEY TAKE OUT FIFO METHOD IN SB SWEEP ACCOUNTS. THEY LEVY ALL SORTS OF CHARGES FOR THEIR GAIN WHIC OTER BANKS DONT!

THEIR MODUS OPERANDI IN MANY THINGS AND FOR CUSTOMER GRIEVANCES ISNT IN GOOD STEAD.
THEIR NETBANKING IS A CONSTANT PAIN! IT DOENST EVEN SHOW YR OVERALL BALANCE!

THEY ARE A GLITTER/SHINE WITH NO REAL STUFF!

GIVEN THE OPTION, I PREFER NOT TO BE THEIR CUSTOMER!


REPLY

paresh

In Reply to KUMAR 4 years ago

I agree with Kumar's Point about the HDFC net banking, Its the most worst of all. To add a beneficiary,they take 12 hours, which is ridiculous at the time of urgency, even if for inter bank transfers. Best is CITI bank. much better than all.

paresh

In Reply to KUMAR 4 years ago

I agree with Kumar's Point about the HDFC net banking, Its the most worst of all. To add a beneficiary,they take 12 hours, which is ridiculous at the time of urgency, even if for inter bank transfers. Best is CITI bank. much better than all.

paresh

In Reply to KUMAR 4 years ago

I agree with Kumar's Point about the HDFC net banking, Its the most worst of all. To add a beneficiary,they take 12 hours, which is ridiculous at the time of urgency, even if for inter bank transfers. Best is CITI bank. much better than all.

paresh

In Reply to KUMAR 4 years ago

I agree with Kumar's Point about the HDFC net banking, Its the most worst of all. To add a beneficiary,they take 12 hours, which is ridiculous at the time of urgency, even if for inter bank transfers. Best is CITI bank. much better than all.

paresh

In Reply to KUMAR 4 years ago

I agree with Kumar's Point about the HDFC net banking, Its the most worst of all. To add a beneficiary,they take 12 hours, which is ridiculous at the time of urgency, even if for inter bank transfers. Best is CITI bank. much better than all.

India to get banking info from Switzerland on liberal terms

The mutual agreement will enable India to get information even if they have only limited details regarding the person having bank accounts in Switzerland

New Delhi: In a development that will boost the fight against black money menace, Switzerland has agreed to provide details of secret bank accounts of individuals sought by India even on the basis of limited information, reports PTI.

Under a mutual agreement reached on 20th April between the two countries, Switzerland has agreed to give liberal interpretation to the provisions concerning identities of Indian citizens.

"... it is sufficient if the requesting state identifies the person by other means than by indicating the name and address of the person concerned, and indicates to the extent known, the name and address of any person believed to be in possession of the requested information," a Finance Ministry release said on Monday.

Under the existing bilateral treaty, the requesting country has to compulsorily provide the name of the person under examination and the name of the foreign holder of the information. These are part of the identity requirements without which the information would not be shared by the other country.

"This was a restrictive provision and not in line with the international standards," the release said.

The agreement was signed under the Double Taxation Avoidance Agreement (DTAA) between the two countries.

"This agreement is beneficial to India because it gives liberal interpretation to the identity requirements for exchange of information which India will be seeking from Switzerland and is in line with international standards," the release said.

The pact would allow liberal interpretation of Article 26, concerning exchange of information.

"The conditions as clarified by Switzerland, will enable India to get information even if we have only limited details regarding the person having bank accounts in Switzerland," the release said.

India had inked the pact with Switzerland to revise their bilateral taxation treaty in August 2010. The revised treaty was approved by Swiss Parliament on 17th June last year.

The new agreement was signed by Sanjay Kumar Mishra Joint Secretary (Foreign Tax & Tax Research division), Central Board of Direct Taxes (CBDT) and Juerg Giraudi, Head of Division of International Tax Affairs, Swiss Federal Department of Finance.

The Cabinet had earlier approved the mutual pact on 23rd March. "... this mutual agreement will apply from the date on which the amending Protocol which was signed on 30 August 2010, has come into effect 1 April 2011," the release said.

As per data from the Swiss National Bank, the total deposits of Indian individuals and companies in Swiss banks stood at about $2.5 billion at the end of 2010.

User

COMMENTS

Aban

5 years ago

That is ok as far as it goes on paper. The question is: will the authorities in bureaucracy/admn. (read:IAS) and the political power act on the info.? Already there is enough and nobody knows what has happened to the info. with the bent officers and leaders easily approachable.

Up home loan cap to Rs10 lakh for priority sector: RBI to RRBs

“It has been decided to increase the limit from Rs5 lakh to Rs10 lakh for the bank loans extended to non-governmental agencies, approved by NHB for their refinance, for home loans” the RBI said

Mumbai: The Reserve Bank of India (RBI) asked all regional rural banks (RRBs) to double the limit for home loans to Rs10 lakh from Rs5 lakh for consideration under priority sector lending schemes, reports PTI.

“It has been decided to increase the limit from Rs5 lakh to Rs10 lakh for the bank loans extended to non-governmental agencies, approved by NHB for their refinance, for on-lending for the purpose of construction or reconstruction of individual dwelling units...and rehabilitation of slum dwellers,” the RBI said in a notification.

Loans of such nature fall under indirect finance to housing sector as the final disbursement is done through National Housing Bank(NHB) approved non-governmental agencies.

In August 2007, the central bank, kept the ceiling of loan component of Rs5 lakh per dwelling unit for the priority sector lending and since then, the RRBs have been considering the home loan limit up to Rs5 lakh under for the weaker sections of society under priority sector lending scheme.

In view of the shortage of housing for low income groups in major cities and towns, the finance minister in his budget for 2012-13 also proposed to enhance the limit of indirect finance under priority sector from Rs5 lakh to Rs10 lakh.

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