Seven prominent private sector banks, including HDFC Bank Ltd, YES Bank Ltd, IndusInd Bank Ltd, ICICI Bank Ltd, Axis Bank Ltd, Kotak Mahindra Bank Ltd, and IDBI Bank Ltd, increased their combined market capitalisation (m-cap) by Rs 64,000 crore on a day when the benchmark BSE Bankex rose twice as much as the Sensex.
At the close of trading, HDFC Bank, the largest private lender, was trading 2.10 percent higher at Rs 1,432.25. Its market value stood at Rs 10,87,489.96 crore, up from Rs 10,65,587.50 crore on Thursday. ICICI Bank, the second largest private lender, saw its market capitalization increase to Ts 7,62,060.83 crore from Rs 7,39,436.81 crore, while the stock increased 3.28 percent to Rs 1,088.05.
Kotak Mahindra Bank Ltd, the third-largest private bank by market value, rose 2.14 percent to Rs 1,727. The lender's market capitalization increased to Rs 3,43,001.33 crore from Rs 3,36,113.28 crore the previous day. Axis Bank Ltd rose 2.18 percent to Rs 1,099.20. Axis Bank's market capitalization climbed at Rs 3,39,083.85 crore, up from Rs 3,31,910 crore on Thursday.
While over 235 companies on the BSE reached 52-week highs for the day, none of the BSE Bankex shares were on the list. IndusInd Bank rose 3.54 percent, IDBI Bank increased 1.48 percent, and YES Bank increased 1.35 percent. The seven largest private lenders by market capitalization increased their total assets by Rs 64,919.46 crore to Rs 28,15,967.15 crore, up from Rs 27,51,047.69 crore.
The BSE Bankex index was up 1,219.41 points, or 2.32 percent, at 53,675.99. With this, the banking index has reduced its year-to-date losses to 1.2%. While PSU equities have enjoyed consistent buying interest recently, private banks are down as they struggle with a record high CD ratio.
According to IIFL Securities, private banks' loan growth is expected to decrease due to rising risk-weights, poor deposit growth, and the RBI's push to lower credit-deposit ratios.
Corporate loan growth has improved from previous levels, but due to poor pricing power, it is unlikely to accelerate significantly. "HDFC, Kotak Mahindra Bank, IndusInd Bank, and Federal have potential to raise their proportion of unsecured loans. We expect the system loan growth rate to drop to 13-14 percent in FY25E," IIFL stated.
