PROJECT REPORT

FOR FINX(STOCK TRADING)

‘Understanding Banking Ratios & Key Financial Metrics for Banks’

Bachelor of Commerce
(2024-2028)

UNDER THE SUPERVISION OF

Dr. Priya Sharma

SUBMITTED BY:
Mahi Bareja
52817788824

Vivekananda School of Business Studies

Vivekananda Institute of Professional Studies
Guru Gobind Singh Indraprastha University
 TO WHOM IT MAY CONCERN

I, Mahi Bareja,Enrolment No. 5281778824, from BCOM-2B semester of the Vivekananda

Institute of Professional Studies, Delhi hereby declare trial the Project Report (BCOM H)
entitled ‘’Understanding Banking Ratios & Key Financial Metrics for Banks” is an original
work and the same has not been submitted io any other Institute for the award of any other
degree. A presentation of the Project Report was made on the study of Differences in
Financing in 2 companies and the suggestions as approved by the faculty were duly
incorporated
Date: Signature of the Student:

Certified that the Project Report submitted in partial fulfillment of Bachelor of

Commerce (Bcom) to be awarded by G.G.S.I.P. University, Delhi by Mahi Bareja ,
Enrolment No. 5281778824 has been completed under my guidance
and is Satisfactory.

Date: Signature of the Guide:

Name of the Guide:
Designation:

S.No Content Page No.

1. Title Page 1

2. Certificate 2

3. Acknowledgment 3

4. Objective 4

5. Introduction 5

6. Kotak Mahindra-Overview 6-7

7. Hdfc Bank- Overview 8-10

8. SBI- Overview 11-13

9. ICICI bank- Overview 14-16

10. RBI Reports and Annual 17-31

Reports

11. Comparative Ratios 32-35

Analysis

12. Answer to key questions 36-39

13. Comparative Graph and 40-42

Analysis

14. Final comparative 43-45

Conclusion

15. Summary and insights 46-47

16. Presentation
 Acknowledgement
No work is complete without the contribution and encouragement from many people.
First of all, I would like to thank almighty for making me capable enough to write and present
this report to the reader.
His blessings are enormous, and I am short of words to thank him for this.
Secondly, this report would not have been possible without - Dr. Priya Sharma, VSBS, VIPS
as her patient and expert guidance as well as enthusiastic encouragement not to mention the
appreciation and constructive critique of my work had paved the way for the development of
this report.
Her advice and assistance in keeping my progress on schedule has been very much
appreciated.
Finally, I would like to thank my family, friends and supportive batchmates who believed in
me and supported my vision to present my ideas in the form of this small piece of
information. I am really grateful and blessed.

Objectives of the Project

1. To Understand the Role and Relevance of Financial Ratios in Banking

This project aims to build a foundational understanding of how financial ratios—such as Net
Interest Margin (NIM), Return on Assets (ROA), Return on Equity (ROE), Gross and Net
Non-Performing Assets (GNPA/NNPA), Cost-to-Income Ratio, and Capital Adequacy Ratio
(CAR)—help in evaluating a bank’s performance, health, and sustainability.
 2. To Compare the Financial Performance of Leading Indian Banks

A core goal of this project is to conduct a comparative analysis of four major Indian
banks—ICICI Bank, HDFC Bank, State Bank of India (SBI), and Kotak Mahindra
Bank—based on their financial performance in FY 2023–24. This includes studying
profitability, asset quality, capital strength, liquidity, and operational efficiency.

3. To Assess Risk Management Practices through Asset Quality and Provisioning

The project intends to analyze how effectively each bank manages credit risk and non-
performing assets (NPAs) by examining the Provision Coverage Ratio (PCR) and trends in
GNPA/NNPA. This helps identify which bank is more resilient against financial shocks and
has better risk-mitigation strategies.

4. To Evaluate Operational Efficiency and Cost Management

Through ratios like cost-to-income and credit-deposit, the study evaluates how efficiently
each bank converts income into profits and how well they manage operating expenses. This
objective helps in understanding the productivity and internal health of banking operations.

5. To Examine Capital Adequacy and Liquidity Management

The project seeks to explore each bank’s capital buffers (CAR) and CASA ratios to determine
their financial stability, ability to absorb losses, and reliance on low-cost deposits. These
aspects are vital for compliance with RBI regulations and long-term growth.

6. To Study the Impact of Regulatory Oversight and RBI Guidelines

The report includes an analysis of regulatory actions, RBI penalties, and D-SIB status to
understand how external regulatory frameworks affect internal banking operations,
compliance culture, and systemic importance.

7. To Understand the Role of Digital Innovation and Strategic Initiatives

This objective covers how banks like ICICI, HDFC, and Kotak are leveraging digital banking
platforms, AI, machine learning, and fintech partnerships to enhance customer experience,
reduce costs, and increase efficiency in a competitive landscape.

8. To Identify the Most Financially Sound and Balanced Bank

Finally, the project aims to draw a comprehensive conclusion about which bank demonstrates
the best overall performance in terms of profitability, risk control, operational efficiency, and
digital transformation—thereby offering useful insights for investors, policymakers, and
stakeholders.

INTRODUCTION

Kotak Mahindra Bank

It is one of India’s leading private sector banks, headquartered in Mumbai, Maharashtra.
Founded in 1985 as Kotak Mahindra Finance Ltd., it became a full-fledged bank in 2003 after
receiving a banking license from the Reserve Bank of India — making it the first non-
banking finance company (NBFC) in India to transition into a bank. The bank offers a wide
range of financial services including personal banking, corporate banking, wealth
management, and insurance. Known for its strong focus on technology and innovation, Kotak
has built a significant digital presence with platforms like Kotak 811, a fully digital savings
account. As of FY 2023–24, Kotak Mahindra Bank reported steady growth in profits, a
healthy asset quality with low non-performing assets (NPAs), and a strong capital adequacy
ratio. It operates through thousands of branches and ATMs across the country and has a
growing international presence. Following the stepping down of its founder Uday Kotak in
2023, Ashok Vaswani was appointed as the new Managing Director and CEO. The bank
continues to maintain a reputation for prudent risk management, customer-centric services,
and a strategic focus on digital and sustainable banking.

Kotak Mahindra Bank delivered a strong financial performance in FY 2023–24, marked by

significant growth in profitability and operational efficiency. The bank’s standalone net profit
increased by 26% year-on-year to ₹13,782 crore, while consolidated profit after tax (PAT)
rose 22% to ₹18,213 crore. This growth was driven by a 21% rise in Net Interest Income
(NII), which reached ₹25,993 crore for the year.

Operating profit for FY24 grew by 32% year-on-year to ₹19,587 crore, reflecting enhanced
operational efficiency. The bank’s asset quality remained stable, with a gross non-
performing assets (NPA) ratio of 1.39% as of March 31, 2024. The capital adequacy ratio
stood at 20.55%, indicating a strong capital position.

Despite regulatory challenges, including restrictions imposed by the Reserve Bank of India in
April 2024 on onboarding new digital customers due to IT infrastructure gaps, Kotak
Mahindra Bank continued to demonstrate resilience and adaptability in its operations. The
bank’s strategic focus on digital transformation and customer-centric services positions it
well for sustained growth in the evolving financial landscape
Kotak Mahindra Bank delivered a strong financial performance in FY 2023–24, marked by
significant growth in profitability and operational efficiency. The bank’s standalone net profit
increased by 26% year-on-year to ₹13,782 crore, while consolidated profit after tax (PAT)
rose 22% to ₹18,213 crore. This growth was driven by a 21% rise in Net Interest Income
(NII), which reached ₹25,993 crore for the year.

Operating profit for FY24 grew by 32% year-on-year to ₹19,587 crore, reflecting enhanced
operational efficiency. The bank’s asset quality remained stable, with a gross non-
performing assets (NPA) ratio of 1.39% as of March 31, 2024. The capital adequacy ratio
stood at 20.55%, indicating a strong capital position.

Despite regulatory challenges, including restrictions imposed by the Reserve Bank of India in
April 2024 on onboarding new digital customers due to IT infrastructure gaps, Kotak
Mahindra Bank continued to demonstrate resilience and adaptability in its operations. The
bank’s strategic focus on digital transformation and customer-centric services positions it
well for sustained growth in the evolving financial landscape
 HDFC BANK

HDFC Bank Limited, headquartered in Mumbai, is India’s largest private sector bank by
assets and market capitalization. Established in 1994, it was among the first to receive
approval from the Reserve Bank of India (RBI) to set up a private sector bank under the
liberalization of the Indian banking industry. The bank offers a comprehensive range of
financial products and services, including retail banking, wholesale banking, treasury
operations, and digital banking solutions. Its customer-centric approach and commitment to
innovation have positioned it as a leader in the Indian banking sector.

In a significant development, HDFC Bank merged with its parent company, Housing
Development Finance Corporation (HDFC) Limited, effective July 1, 2023. This merger
created a financial powerhouse, combining HDFC’s expertise in housing finance with HDFC
Bank’s robust banking operations. The amalgamation has expanded the bank’s product
offerings, particularly in the home loan segment, and enhanced its reach across various
customer segments.

Financially, HDFC Bank has demonstrated strong performance. For the quarter ended March
31, 2024, the bank reported a consolidated profit after tax of ₹17,616 crore, marking a 7%
year-on-year increase. The bank’s net interest income (NII) for the same quarter stood at
₹23,351 crore, reflecting its ability to maintain healthy margins. As of March 31, 2024, the
bank’s gross non-performing assets (NPA) ratio was at 1.34%, indicating strong asset quality.
HDFC Bank’s extensive network includes over 7,900 branches and more than 15,000 ATMs
across India, ensuring widespread accessibility for its customers. The bank has also been at
the forefront of digital banking, offering a range of online and mobile banking services to
cater to the evolving needs of its clientele. Its subsidiaries, such as HDFC Life, HDFC
ERGO, HDFC Mutual Fund, and HDB Financial Services, further diversify its financial
services portfolio, reinforcing its position as a comprehensive financial services provider.

Committed to sustainability and responsible banking, HDFC Bank emphasizes

environmental, social, and governance (ESG) principles in its operations. The bank’s
initiatives in financial inclusion, community development, and environmental conservation
reflect its dedication to contributing positively to society.

In summary, HDFC Bank’s strategic mergers, robust financial performance, expansive

network, and commitment to innovation and sustainability underscore its stature as a leading
institution in India’s banking landscape.

After the landmark merger with HDFC Ltd. in July 2023, HDFC Bank became not just the
largest private sector bank but also among the top five banks in the world by market
capitalization. The merger created a combined entity with a balance sheet size of over ₹32
lakh crore and a customer base exceeding 12 crore people. This move significantly
strengthened HDFC Bank’s home loan portfolio and allowed it to offer a seamless suite of
banking and housing finance products under one roof. In terms of financial health, the bank
maintained a robust Capital Adequacy Ratio (CAR) of 18.8% as of March 31, 2024, well
above the regulatory requirements, ensuring financial resilience and strong lending capacity.

HDFC Bank’s loan book grew steadily, driven by strong demand in retail and SME sectors,
along with stable corporate lending. Advances grew by around 55% year-on-year after the
merger impact, while deposits increased by 26%, showcasing healthy liquidity. The Net
Interest Margin (NIM) stood at approximately 3.44%, slightly compressed due to the merger
dynamics but still reflecting efficient lending practices. Its gross NPA ratio of 1.34% and net
NPA ratio of 0.31% highlight the bank’s effective risk management and asset quality
controls.

On the technology front, HDFC Bank continues to invest heavily in digital banking, AI, and
cybersecurity. It has launched several initiatives to enhance digital onboarding, improve
mobile banking services, and create fully digital branches. Around 95% of transactions are
now processed through digital channels, underlining the bank’s push towards becoming a
“technology-first bank.”
Leadership under CEO Sashidhar Jagdishan has been marked by a strong focus on integrating
HDFC Ltd. smoothly, expanding into semi-urban and rural areas, and building a futuristic,
digitally empowered organization. The bank is also actively working toward ESG goals,
targeting carbon neutrality and financial inclusion through initiatives like Parivartan (its CSR
arm).

In summary, HDFC Bank is strategically positioned for long-term growth, balancing

aggressive expansion with conservative risk management, strong customer relationships, and
continuous technological innovation.

State Bank of India (SBI)

The State Bank of India (SBI) is the nation’s largest and oldest public sector bank, with a
legacy tracing back over two centuries. Established in 1806 as the Bank of Calcutta, it
evolved into the Imperial Bank of India in 1921 through the merger of three presidency
banks. In 1955, the Imperial Bank was nationalized and renamed as the State Bank of India,
marking a significant milestone in India’s banking history.

Headquartered in Mumbai, SBI operates an extensive network of over 22,000 branches and
45,000 ATMs across India, serving as a cornerstone of the country’s financial infrastructure.
Its international presence spans 131 offices in 32 countries, reflecting its role as a global
banking institution.

In the fiscal year 2023–24, SBI reported robust financial performance, with its balance sheet
surpassing ₹61 lakh crore. The bank’s market share stood at 22.55% in deposits and 19.06%
in advances, underscoring its dominant position in the Indian banking sector.

SBI’s net profit for FY24 reached ₹61,077 crore, marking a 21.6% increase from the previous
year. This growth was driven by strong loan demand, with domestic and overall loan growth
rates at 16.26% and 15.24% respectively.

The bank’s asset quality improved, with the gross non-performing asset (NPA) ratio
declining to 2.07% as of March 31, 2024. SBI’s capital adequacy ratio remained strong,
ensuring financial stability and resilience.

SBI continues to focus on digital transformation, enhancing customer experience through

initiatives like YONO (You Only Need One), its integrated digital banking platform. The
bank’s commitment to financial inclusion is evident in its efforts to expand services to
underserved regions, aligning with national objectives.

In summary, the State Bank of India stands as a pillar of the Indian banking system,
combining a rich heritage with a forward-looking approach to meet the evolving needs of its
diverse customer base.
SBI’s leadership in India’s banking sector is reinforced by its vast customer base of over 45
crore people, including individual customers, businesses, and government entities. Its digital
banking platforms, particularly YONO (a mobile and online platform for banking, shopping,
and investments), have gained substantial traction, making banking more accessible to
millions. SBI is also a leader in the home loan market, providing competitive rates and
flexible terms to borrowers, alongside other retail banking services like personal loans, car
loans, and credit cards.

The bank’s robust corporate banking services include lending to large-scale industries,
agriculture, and infrastructure projects. It is also actively involved in the government’s
flagship programs like Pradhan Mantri Jan Dhan Yojana, contributing significantly to
financial inclusion by opening millions of new bank accounts for underserved populations.

In terms of international operations, SBI has been expanding its footprint across Asia,
Europe, Africa, and the U.S., offering services to non-resident Indians (NRIs) and catering to
global corporate clients. The bank has a significant presence in the international bond market
and is a key player in cross-border trade finance.

The bank’s profitability has been strong, with consistent growth in its Net Interest Income
(NII), supported by an increase in advances and an overall improvement in asset quality.
Despite fluctuations in interest rates, SBI has maintained a Net Interest Margin (NIM) of
around 3.2%. The bank’s non-performing assets (NPA) have shown significant improvement
due to its focus on reducing bad loans and improving recovery processes.

Sustainability is another key focus area, with SBI making strides in green banking and
environmentally responsible lending. The bank has committed to supporting renewable
energy projects and has become an active participant in the green bond market, funding eco-
friendly infrastructure.

Furthermore, leadership transitions have been smooth, with Dinesh Kumar Khara, the current
Chairman, leading the bank through its modernization phase, ensuring a seamless integration
of technology while maintaining the integrity of its legacy operations.
In summary, SBI continues to evolve as a globally competitive, diversified financial services
powerhouse, combining innovation with a rich legacy to serve the diverse needs of Indian
and international clients.

SBI’s leadership in India’s banking sector is reinforced by its vast customer base of over 45
crore people, including individual customers, businesses, and government entities. Its digital
banking platforms, particularly YONO (a mobile and online platform for banking, shopping,
and investments), have gained substantial traction, making banking more accessible to
millions. SBI is also a leader in the home loan market, providing competitive rates and
flexible terms to borrowers, alongside other retail banking services like personal loans, car
loans, and credit cards.

The bank’s robust corporate banking services include lending to large-scale industries,
agriculture, and infrastructure projects. It is also actively involved in the government’s
flagship programs like Pradhan Mantri Jan Dhan Yojana, contributing significantly to
financial inclusion by opening millions of new bank accounts for underserved populations.

In terms of international operations, SBI has been expanding its footprint across Asia,
Europe, Africa, and the U.S., offering services to non-resident Indians (NRIs) and catering to
global corporate clients. The bank has a significant presence in the international bond market
and is a key player in cross-border trade finance.

The bank’s profitability has been strong, with consistent growth in its Net Interest Income
(NII), supported by an increase in advances and an overall improvement in asset quality.
Despite fluctuations in interest rates, SBI has maintained a Net Interest Margin (NIM) of
around 3.2%. The bank’s non-performing assets (NPA) have shown significant improvement
due to its focus on reducing bad loans and improving recovery processes.

Sustainability is another key focus area, with SBI making strides in green banking and
environmentally responsible lending. The bank has committed to supporting renewable
energy projects and has become an active participant in the green bond market, funding eco-
friendly infrastructure.

Furthermore, leadership transitions have been smooth, with Dinesh Kumar Khara, the current
Chairman, leading the bank through its modernization phase, ensuring a seamless integration
of technology while maintaining the integrity of its legacy operations.
In summary, SBI continues to evolve as a globally competitive, diversified financial services
powerhouse, combining innovation with a rich legacy to serve the diverse needs of Indian
and international clients.

ICICI BANK
ICICI Bank, founded in 1994, is one of India’s leading private-sector banks, headquartered in
Mumbai. With a rich history and a dynamic growth trajectory, ICICI Bank has expanded its
operations to offer a wide range of banking products and services across retail, corporate, and
investment banking segments. It provides services such as savings and current accounts,
loans (home, car, personal, and business), insurance, and wealth management, along with a
comprehensive suite of digital banking solutions. The bank’s offerings extend beyond
traditional banking, including services like asset management, private banking, and
investment banking, which contribute significantly to its revenue.

ICICI Bank has built a strong presence in India with more than 6,600 branches and over
16,000 ATMs, ensuring widespread access to financial services across urban and rural areas.
The bank is also present internationally, with branches in key financial hubs, including the
United States, the United Kingdom, Singapore, Hong Kong, and the Middle East, providing
banking solutions to both individuals and businesses globally. Its international presence helps
cater to the banking needs of non-resident Indians (NRIs), global corporations, and
institutions, further strengthening its position as a global financial player.

Financially, ICICI Bank has consistently delivered strong performance. For the fiscal year
2023–24, the bank’s consolidated profit after tax (PAT) surged by over 20%, driven by robust
growth in retail banking, strong credit growth, and cost optimization. The bank’s Net Interest
Income (NII) showed a significant increase, supported by higher advances, including a
notable rise in the retail loan portfolio. The Net Interest Margin (NIM), which measures the
difference between interest income generated and interest paid out to depositors, remained
solid, highlighting the bank’s ability to maintain efficient asset-liability management.

ICICI Bank also demonstrated strong asset quality management, with its gross non-
performing assets (NPA) ratio improving to 1.39% as of March 2024, signaling effective risk
management practices. The bank has placed considerable emphasis on digital transformation,
with its ICICI Bank iMobile app becoming one of India’s most widely used mobile banking
platforms, offering a range of services from balance checks to bill payments and investments.
The bank has leveraged artificial intelligence (AI) and machine learning (ML) technologies to
enhance customer experiences, improve operational efficiency, and combat fraud.
Sustainability and financial inclusion are key strategic pillars for ICICI Bank. The bank has
significantly expanded its financial inclusion initiatives, supporting underserved communities
and promoting digital literacy. Additionally, ICICI Bank’s corporate social responsibility
(CSR) initiatives focus on education, healthcare, and the environment. The bank also actively
funds renewable energy projects, positioning itself as a key player in India’s green financing
sector.

In summary, ICICI Bank’s strategic approach, coupled with its strong balance sheet, robust
digital banking offerings, and diversified services, has made it one of the most prominent
financial institutions in India and globally. With a continued focus on digital innovation,
sustainable growth, and global expansion, ICICI Bank is well-positioned to maintain its
leadership role in the evolving banking landscape.

ICICI Bank, one of India’s largest private-sector banks, has not only transformed itself into a
dominant player in the financial sector but also set industry benchmarks for innovation,
technology, and customer-centric services. The bank’s evolution from a development
financial institution (DFI) to a fully-fledged commercial bank in 1994 reflects its agility in
adapting to the changing landscape of India’s financial markets.

Digital Transformation and Innovation

ICICI Bank has been at the forefront of digital banking in India. The bank’s digital banking
platform, iMobile, has over 60 million active users, providing them with easy access to
banking services such as money transfers, bill payments, investment management, and more.
The bank’s website and mobile app have evolved to become key tools for day-to-day
banking, offering a seamless, 24/7 digital banking experience. ICICI Bank was also one of
the pioneers in implementing artificial intelligence (AI) and machine learning (ML) to
personalize customer interactions, assess credit risk, and enhance fraud detection
mechanisms. The bank’s use of AI extends beyond customer service into back-office
operations, making processes more efficient.

Retail and Corporate Banking

Retail banking, which includes services like home loans, personal loans, car loans, credit
cards, and insurance, continues to be a major growth driver for ICICI Bank. The bank’s home
loan portfolio, for example, has grown significantly over the years, and its innovative product
offerings such as instant loan approval have made it a go-to bank for many retail customers.
ICICI’s credit card business has also expanded, with a wide range of options for different
customer needs, including rewards, cashback, and travel benefits.
On the corporate side, ICICI Bank offers a wide variety of financial products such as working
capital finance, trade finance, foreign exchange services, and corporate banking solutions to
both large and medium-sized enterprises. The bank has a strong relationship with many
multinational companies and Indian corporations, assisting them with financing and
investment needs across various sectors, including manufacturing, infrastructure, and IT.

Financial Performance and Stability

In terms of financial performance, ICICI Bank has maintained a steady growth trajectory.
The bank’s consolidated profit after tax (PAT) for FY 2023–24 surged by over 20%, driven
by robust credit growth, cost control, and an increase in retail assets. The bank’s net interest
income (NII) grew significantly, supported by improved loan demand, particularly in the
retail and SME sectors. Its non-performing asset (NPA) ratio, which is a key indicator of
asset quality, improved further to 1.39%, reflecting its prudent lending practices. Moreover,
ICICI Bank’s Capital Adequacy Ratio (CAR) remains strong, providing a solid buffer to
absorb shocks and manage risks effectively.

Sustainability and Social Responsibility

ICICI Bank is deeply committed to sustainability and responsible banking. The bank has
made substantial investments in green finance, supporting renewable energy projects, energy-
efficient initiatives, and low-carbon footprint infrastructure projects. In line with India’s
commitment to achieving carbon neutrality, ICICI Bank has positioned itself as a key enabler
of green financing in sectors like solar energy, electric vehicles, and sustainable agriculture.

Moreover, ICICI Bank’s corporate social responsibility (CSR) initiatives focus on education,
healthcare, and community development, with an emphasis on supporting marginalized
communities and promoting financial literacy across rural India. The bank’s efforts in
financial inclusion have seen the establishment of specialized banking branches in rural areas,
offering affordable banking products to underserved populations.

Kotak Mahindra Bank

RBI report of Kotak mahindra

During the fiscal year 2023–24, Kotak Mahindra Bank faced significant regulatory scrutiny
from the Reserve Bank of India (RBI) due to persistent deficiencies in its IT infrastructure
and risk management practices. On April 24, 2024, the RBI imposed restrictions on the bank,
prohibiting it from onboarding new customers through its online and mobile banking
platforms and from issuing new credit cards. This action was taken after the RBI identified
serious concerns regarding the bank’s IT systems, including inadequate user access
management, data security, and prevention of data leaks, which led to multiple service
disruptions, notably a major outage on April 15, 2024.

In response to the RBI’s directives, Kotak Mahindra Bank undertook comprehensive

remedial measures to address the identified shortcomings. The bank appointed Grant
Thornton Bharat as an external auditor to conduct a thorough review of its IT systems and
collaborated with leading technology firms such as Accenture, Infosys, Oracle, and Cisco to
enhance its internal tech capabilities. These efforts aimed to strengthen the bank’s IT
infrastructure, improve cybersecurity measures, and ensure compliance with regulatory
standards.

After assessing the effectiveness of the remedial actions, the RBI lifted the restrictions on
Kotak Mahindra Bank in February 2025, allowing the bank to resume onboarding new
customers digitally and issuing new credit cards. The RBI expressed satisfaction with the
bank’s efforts to rectify the deficiencies and emphasized the importance of robust IT
governance and risk management practices in maintaining financial stability and protecting
consumer interests.

These events underscore the critical role of strong IT infrastructure and compliance in the
banking sector, highlighting the RBI’s commitment to enforcing stringent regulatory
measures to ensure the safety and reliability of banking services in India.

Annual report of Kotak mahindra

Kotak Mahindra Bank’s Integrated Annual Report for FY 2023–24 highlights a year of robust
financial performance and strategic initiatives. The bank reported a 26% year-on-year
increase in standalone Profit After Tax (PAT) to ₹13,782 crore, while consolidated PAT rose
by 22% to ₹18,213 crore.

Strategically, the bank expanded its footprint by acquiring Sonata Finance Private Limited, a
microfinance institution, for ₹537.12 crore. Additionally, it divested a 70% stake in Kotak
Mahindra General Insurance Company Limited to Zurich Insurance Company Limited for
approximately ₹5,560 crore, retaining a 30% shareholding.
In response to the Reserve Bank of India’s (RBI) directive in April 2024, which restricted the
bank from onboarding new digital customers and issuing credit cards due to IT infrastructure
concerns, Kotak Mahindra Bank appointed Grant Thornton Bharat as an external auditor and
collaborated with technology firms like Accenture, Infosys, Oracle, and Cisco to enhance its
IT systems.

The Board of Directors recommended a dividend of ₹2 per equity share for the year ended
March 31, 2024, subject to shareholder approval.

Overall, Kotak Mahindra Bank’s FY 2023–24 performance reflects strong financial growth,
improved asset quality, and proactive measures to strengthen its technological infrastructure.

Ratios

Profitability ratios:

For the financial year 2023–24, Kotak Mahindra Bank reported the following profitability
ratios:
1. Net Interest Margin (NIM): The bank’s NIM stood at 5.28%, reflecting a solid
performance in generating income from loans after accounting for interest on deposits. This
margin demonstrates the bank’s ability to maintain profitability despite prevailing economic
conditions.
2. Return on Assets (ROA): The bank achieved an ROA of 2.61%, indicating its
efficiency in using assets to generate profit. This ratio is a strong indicator of the bank’s
operational effectiveness.
3. Return on Equity (ROE): Kotak Mahindra Bank recorded an ROE of 15.34%,
reflecting its ability to generate significant profit with the capital invested by its shareholders.
This is a healthy ratio, demonstrating efficient use of equity capital to drive profitability.

These ratios illustrate Kotak Mahindra Bank’s robust profitability, with effective
management of assets, equity, and income generation from lending activities.

Asset Quality Ratios:

As of the financial year 2023–24, Kotak Mahindra Bank reported the following asset quality
ratios:
• Gross Non-Performing Assets (GNPA) Ratio: The bank’s GNPA ratio stood at
1.4% on a standalone basis, reflecting a decline from 1.8% in the previous year. This
indicates an improvement in asset quality, with fewer loans turning non-performing.
 • Net Non-Performing Assets (NNPA) Ratio: The NNPA ratio was 0.3%, down
from 0.4% in the prior year. This suggests that after accounting for provisions, the proportion
of non-performing loans is minimal.
• Provision Coverage Ratio (PCR): The PCR stood at 80.6% as of December 31,
2023. This high coverage ratio indicates that the bank has set aside adequate provisions to
cover potential losses from non-performing assets.

These metrics reflect Kotak Mahindra Bank’s effective risk management and prudent
provisioning practices, contributing to its strong asset quality.

Liquidity & Capital Adequacy Ratios:

As of the financial year 2023–24, Kotak Mahindra Bank reported the following liquidity and
capital adequacy ratios:
• Capital Adequacy Ratio (CAR): The bank’s CAR stood at 20.5% as of March
31, 2024, with a Common Equity Tier 1 (CET1) ratio of 19.2%, both comfortably above the
regulatory minimum requirements .
• Current and Savings Account (CASA) Ratio: The CASA ratio was 45.5% as
of March 31, 2024, indicating a strong base of low-cost deposits, which supports the bank’s
net interest margin and overall liquidity position .

These ratios reflect Kotak Mahindra Bank’s robust capital position and liquidity profile,
which are essential for sustaining growth and managing financial stability.

Operational Efficiency Ratios:

As of the financial year 2023–24, Kotak Mahindra Bank reported the following operational
efficiency ratios:
• Cost-to-Income Ratio: The bank’s cost-to-income ratio stood at 45.99% for
FY 2023–24, reflecting effective cost management relative to its income.
• Credit-to-Deposit Ratio (CDR): The CDR was 87.4% as of December 31,
2024, indicating a balanced approach between loans and deposits.

These ratios highlight Kotak Mahindra Bank’s operational efficiency and prudent lending
practices.
HDFC Bank: FY 2023–24 Overview

1. Designation as a Domestic Systemically Important Bank (D-SIB)

In November 2024, the RBI reaffirmed HDFC Bank’s status as a Domestic Systemically
Important Bank (D-SIB). Following its merger with HDFC Ltd. in July 2023, HDFC Bank’s
systemic importance increased, leading to an elevation in its D-SIB categorization. Effective
April 2025, the bank’s additional Common Equity Tier 1 (CET1) capital requirement will rise
from 0.20% to 0.40% of its risk-weighted assets.

2. Financial Performance Highlights

• Consolidated Net Revenue: ₹807.0 billion, marking a 133.6% increase from
the previous year.
• Consolidated Profit After Tax: ₹640.6 billion, up by 39.3% year-over-year.
• Net Interest Income (Standalone): ₹290.8 billion for Q4 FY24, a 24.5% rise
compared to Q4 FY23.
• Core Net Interest Margin: 3.44% on total assets; 3.63% on interest-earning
assets.
• Earnings Per Share (EPS): ₹23.2 for Q4 FY24.
• Book Value Per Share: ₹600.8 as of March 31, 2024.

3. Asset Quality and Capital Adequacy

While specific GNPA and NNPA ratios for FY24 are not detailed in the provided sources, the
bank’s robust profit growth and capital adequacy suggest a stable asset quality. The RBI’s
Financial Stability Report indicates that Indian banks, including HDFC Bank, have
maintained strong capital positions, with no bank expected to breach the minimum capital
requirement of 9% under stress scenarios.

4. Regulatory Actions by RBI

a. Penalty for KYC Norm Violations

In March 2025, the RBI imposed a monetary penalty of ₹75 lakh on HDFC Bank for non-
compliance with certain provisions of the RBI’s Know Your Customer (KYC) directions.
The bank was found to have allotted multiple Customer Identification Codes to certain
customers instead of a unique code for each customer, among other violations.

5. Strategic Initiatives and Outlook

• Loan Securitisation Growth: HDFC Bank plans to expand its loan
securitisation business over the next 3–5 years to meet rising investor demand.
• Deposit Mobilization: In Q1 FY25, the bank reported a 5.9% growth in
deposits, outpacing the 2.5% rise in the previous quarter. Low-cost current and savings
account (CASA) deposits grew by 8.2%.
• Digital Banking Enhancements: Post the lifting of previous restrictions, HDFC
Bank continues to invest in strengthening its digital banking infrastructure to enhance
customer experience and operational efficiency.

Annual report of HDFC

The HDFC Bank Integrated Annual Report for FY 2023–24 outlines the bank’s performance
after its landmark merger with HDFC Ltd., making it India’s largest private sector bank by
balance sheet size. The report emphasizes robust financial growth, digital innovation, and
enhanced customer focus. It highlights strong asset quality, increasing profitability, and
improved capital adequacy. Strategic priorities include sustainability, governance reforms,
and digital-first services. HDFC Bank also outlines future plans for expanding credit
offerings and strengthening risk frameworks.

RATIOS

Profitability Ratios (FY 2023–24)

1. Net Interest Margin (NIM):
HDFC Bank’s NIM stood at 3.41% for FY 2023–24, reflecting the bank’s efficiency in
earning income from its interest-bearing assets.
2. Return on Assets (ROA):
The bank reported an ROA of 1.59%, indicating how effectively it utilized its assets to
generate profits during the fiscal year.
3. Return on Equity (ROE):
HDFC Bank achieved an ROE of 14.12%, showcasing the return generated on shareholders’
equity.

Asset Quality Ratios: FY 2023–24

 1. Gross Non-Performing Assets (GNPA):
As of March 31, 2024, HDFC Bank’s GNPA stood at 1.24% of gross advances, reflecting a
slight improvement from 1.26% in the previous quarter and an increase from
1.12% in the prior year.
2. Net Non-Performing Assets (NNPA):
The NNPA ratio was 0.33% of net advances as of March 31, 2024, indicating a marginal
increase from 0.31% in the previous quarter.
3. Provision Coverage Ratio (PCR):
While the exact PCR figure for FY 2023–24 isn’t specified in the available sources, HDFC
Bank has consistently maintained a robust PCR, often exceeding 70%, demonstrating its
commitment to provisioning for potential loan losses.

Liquidity and Captial Adequacy ratios :

Capital Adequacy Ratio (CAR)

As of March 31, 2024, HDFC Bank’s Capital Adequacy Ratio (CAR) under Basel III
guidelines stood at 18.8%, comfortably above the regulatory requirement of 11.7%. This
robust CAR indicates the bank’s strong capital position, enabling it to absorb potential losses
and maintain financial stability.

Current & Savings Account (CASA) Ratio

The bank’s CASA ratio was 38.2% as of March 31, 2024. This metric reflects the proportion
of low-cost deposits (current and savings accounts) to total deposits, which is crucial for the
bank’s cost of funds and overall profitability.

Operational Efficiency Ratios: FY 2023–24

1. Cost-to-Income Ratio:
For the fiscal year 2023–24, HDFC Bank reported a consolidated cost-to-income ratio of
59.98%, a significant increase from 40.61% in the previous year. This rise is attributed to the
integration costs and operational adjustments following the merger with HDFC Ltd.
2. Credit-Deposit Ratio (CDR):
The bank’s credit-to-deposit ratio stood at 108.0% during FY24, up from 88.3% in FY23.

● SBI
RBI report

The Reserve Bank of India’s (RBI) latest assessments provide insights into the State Bank of
India’s (SBI) financial health and systemic importance within India’s banking sector.

SBI’s Designation as a Domestic Systemically Important Bank (D-SIB)

As of November 2024, the RBI reaffirmed SBI’s status as a Domestic Systemically Important
Bank (D-SIB), indicating its critical role in the financial system.

Starting April 1, 2025, SBI’s additional Common Equity Tier 1 (CET1) capital requirement
will increase from 0.60% to 0.80% of its risk-weighted assets.

Asset Quality and Capital Adequacy

The RBI’s December 2024 Financial Stability Report highlighted that Indian banks, including
SBI, have improved asset quality, with the gross non-performing asset (GNPA) ratio at a 12-
year low of 2.6% as of September 2024.

Under stress scenarios, the GNPA ratio could rise to 3% by March 2026; however, no bank is
expected to breach the minimum capital requirement of 9%.

Risk Management and Regulatory Oversight

In July 2024, the RBI issued Master Directions on Fraud Risk Management for regulated
entities, including SBI, emphasizing robust internal controls and governance frameworks.

The Reserve Bank of India (RBI) publishes its Annual Report each year, providing a
comprehensive overview of the Indian economy, the banking sector, and the RBI’s operations
and policy decisions. The most recent report available covers the fiscal year 2023–24.

Key Highlights from the RBI Annual Report 2023–24

 • Monetary Policy and Inflation: The report details the RBI’s monetary policy
stance during the year, including interest rate decisions and measures taken to manage
inflation.
• Banking Sector Performance: It provides insights into the health of the
banking sector, including metrics like Non-Performing Assets (NPAs), credit growth, and
capital adequacy ratios.
• Financial Markets: The report analyzes developments in financial markets,
including trends in government securities, foreign exchange markets, and liquidity
conditions.
• Public Debt Management: It reviews the management of public debt,
including borrowing programs and debt sustainability.
• Currency Management: The report covers currency operations, including the
issuance and management of currency notes.
• Financial Inclusion and Literacy: It outlines initiatives undertaken to promote
financial inclusion and enhance financial literacy across the country.
• Economic Outlook: The report provides an assessment of the domestic and
global economic outlook, highlighting potential risks and growth prospects.

Ratios

Profitability Ratios of SBI

1. Net Interest Margin (NIM)

• Q1FY25: 3.35% (Whole Bank)
• FY24: 3.28% (Whole Bank)
• FY23: 3.30% (Whole Bank)

SBI’s NIM reflects the difference between interest earned on loans and interest paid on
deposits. The slight decline in Q1FY25 is attributed to increased funding costs, particularly
from fixed deposits.

2. Return on Assets (ROA)

• Q1FY25: 1.10%
• FY24: 1.04%
• FY23: 1.02%

ROA indicates how efficiently the bank utilizes its assets to generate profit. The improvement
in ROA over the past year suggests enhanced asset utilization.

3. Return on Equity (ROE)

• Q1FY25: 20.98%
 • FY24: 20.32%
• FY23: 16.77%

ROE measures the profitability relative to shareholders’ equity. The increase in ROE
indicates that SBI has been effectively generating profit from its equity base.

Asset Quality Ratios of SBI

1. Gross Non-Performing Assets (GNPA)

• Ratio: 2.24%
• Year-over-Year Change: Decreased by 54 basis points from 2.78% in FY2023
• Amount: ₹84,276 crore
• Source:

2. Net Non-Performing Assets (NNPA)

• Ratio: 0.57%
• Year-over-Year Change: Decreased by 10 basis points from 0.67% in FY2023
• Source:

3. Provision Coverage Ratio (PCR)

• Ratio (Including AUCA): 91.89%
• Year-over-Year Change: Stable compared to 91.91% in FY2023
• Source:

These improvements reflect SBI’s effective risk management strategies and proactive
measures in managing non-performing assets.

Liquidity and capital adequacy ratios:

As of March 31, 2024, the State Bank of India (SBI) reported the following key liquidity and
capital adequacy metrics:

Capital Adequacy Ratio (CAR)

• CAR: 14.28%
• This indicates a strong capital buffer, well above the regulatory minimum,
ensuring SBI can absorb potential losses and support growth.

CASA (Current Account Savings Account) Ratio

• CASA Ratio: 41.11%
• This reflects a healthy proportion of low-cost deposits, contributing to reduced
funding costs and improved net interest margins.

SBI’s robust CAR and CASA ratios underscore its financial stability and efficient cost
management.
Here’s the updated and clearly presented data on Operational Efficiency Ratios for the State
Bank of India (SBI) as of Fiscal Year 2024:

Operational efficiency ratios

1. Cost-to-Income Ratio (C/I Ratio):
• Definition: This ratio measures the bank’s efficiency in managing its operating
costs relative to its income. Lower values indicate better efficiency.
• SBI’s C/I Ratio (FY24):
60.0%
• Previous Year (FY23): 56.2%
• Reason for Increase: A one-time wage arrears provision of ₹15,877 crore
significantly raised operating expenses.
• Projection:
Expected to normalize to 54–55% over the next two years due to improved operating
efficiency and digital transformation efforts.

2. Credit-Deposit Ratio (C/D Ratio):

• Definition: This ratio indicates how much of the deposits the bank has utilized
for lending. A higher ratio suggests more active lending, but excessive values may signal
liquidity risks.
• SBI’s C/D Ratio (FY24):
68.34%
• Previous Year (FY23): 65.28%
• Interpretation: For every ₹100 in deposits, SBI has lent ₹68.34 as advances.

● ICICI BANK
RBI report
The Reserve Bank of India (RBI) has provided several insights and directives concerning
ICICI Bank in its recent reports and advisories. Here’s a summary:

ICICI Bank’s Status and Performance

• Systemically Important Bank: The RBI continues to designate ICICI Bank as a
Domestic Systemically Important Bank (D-SIB), indicating its critical role in India’s
financial system. This classification requires ICICI Bank to maintain higher capital buffers to
ensure stability.
• Asset Quality Trends: While the RBI’s Financial Stability Report (FSR) for
June 2024 doesn’t provide bank-specific details, it notes an overall improvement in the
banking sector’s asset quality. The gross Non-Performing Assets (NPA) ratio decreased from
3.2% in September 2023 to 2.8% in March 2024, with projections suggesting a further
decline to 2.5% by March 2025.

Regulatory Actions and Compliance

• Monetary Penalties: In March 2018, the RBI imposed a monetary penalty of
₹589 million on ICICI Bank for non-compliance with directions related to the direct sale of
securities from its Held to Maturity (HTM) portfolio and the specified disclosures in this
regard.
• Past Compliance Issues: In 2013, following the “Operation Red Spider” sting
operation, the RBI fined ICICI Bank ₹1 crore for violations related to Know Your Customer
(KYC) and Anti-Money Laundering (AML) guidelines.

Annual Report

Financial Highlights from ICICI Bank’s Annual Report (FY 2023–24)

• Net Interest and Non-Interest Income: ₹972.55 billion, marking an 18.6%
increase from the previous fiscal year.
• Core Operating Profit: ₹581.22 billion, up by 18.3%.
• Provisions and Contingencies (excluding tax): Reduced by 45.3% to ₹36.43
billion.
• Profit Before Tax (excluding treasury gains): ₹544.79 billion, a 28.3% rise.

RBI Advisories and Consumer Protection

• Fraud Awareness: The RBI advises the public to be cautious against dubious
deposit schemes and emphasizes that it never asks for personal bank account details.
 • Internal Ombudsman: Banks, including ICICI Bank, are advised to appoint
Internal Ombudsmen to enhance grievance redressal mechanisms.

Ratio

ICICI Bank Profitability Ratios (FY 2023–24)

1. Net Interest Margin (NIM)

• Consolidated NIM: 3.79%
• Standalone NIM: 4.53%
• Trend: The standalone NIM remained stable compared to the previous year,
reflecting consistent earnings from core lending operations.

2. Return on Assets (ROA)

• ROA: 2.22%
• Trend: An improvement from 2.18% in FY 2022–23, indicating enhanced
efficiency in asset utilization.

3. Return on Equity (ROE)

• ROE: 17.4%
• Trend: An increase from 15.9% in FY 2022–23, demonstrating stronger
profitability relative to shareholder equity.

These ratios highlight ICICI Bank’s robust financial performance in FY 2023–24, marked by
stable net interest margins and improved returns on both assets and equity.

Asset Quality Ratios (FY 2023–24)

1. Gross NPA Ratio

• As of March 31, 2024: 2.3%
• Previous Year (March 31, 2023): 2.9%
• Interpretation: The decline in the Gross NPA ratio indicates an improvement
in the bank’s asset quality, reflecting a lower proportion of loans turning non-performing.

2. Net NPA Ratio

• As of March 31, 2024: 0.5%
• Previous Year (March 31, 2023): 0.5%
• Interpretation: The stable Net NPA ratio suggests consistent provisioning and
effective management of non-performing assets.

3. Provision Coverage Ratio (PCR)

• As of March 31, 2024: 80.3%
• Previous Year (March 31, 2023): Not specified in the provided data.
 • Interpretation: A PCR of 80.3% indicates that the bank has made provisions
covering over 80% of its gross NPAs, showcasing a strong buffer against potential loan
losses.

Liquidity and Capital Adequacy Ratio

These ratios reflect ICICI Bank’s robust asset quality and prudent risk management practices
during FY 2023–24.

Capital Adequacy Ratio (CAR)

• Total CAR: 16.33% as of March 31, 2024
• Previous Year (FY 2022–23): 18.34%
• Interpretation: The CAR decreased year-on-year but remains well above the
regulatory requirement of 11.70%, indicating that ICICI Bank maintains a strong capital
buffer to absorb potential losses.

Current & Savings Account (CASA) Ratio

• Average CASA Ratio (Q4 FY 2023–24): 38.9%
• Interpretation: The CASA ratio reflects the proportion of low-cost deposits in
the bank’s total deposit base. A ratio of 38.9% indicates a healthy level of low-cost funding,
which supports the bank’s net interest margin and overall profitability.

These ratios demonstrate ICICI Bank’s solid capital position and stable funding profile
during FY 2023–24, underscoring its financial resilience and operational efficiency.

Operational Efficiency Ratios (FY 2023–24)

1. Cost-to-Income Ratio
• Consolidated: 60.39%
• Standalone: 32.56%
• Interpretation: The consolidated cost-to-income ratio reflects the bank’s
overall operational efficiency, including its subsidiaries. A lower ratio indicates better
efficiency.

2. Credit-Deposit Ratio (CDR)

• As of March 31, 2024: Approximately 83.8%
• Interpretation: This ratio indicates that ICICI Bank has lent out about 83.8% of
its total deposits, reflecting a balanced approach between lending and maintaining liquidity.
These ratios suggest that ICICI Bank maintained strong operational efficiency in FY
2023–24, with a healthy balance between income and expenses, as well as prudent lending
practices.

Here’s a comparative analysis of key financial ratios for Kotak Mahindra Bank, HDFC Bank,
ICICI Bank, and State Bank of India (SBI) over the past five fiscal years (FY2020–FY2024):

Observations
• Profitability:
• ICICI Bank has shown significant improvement in profitability, with ROE
increasing from 9.72% to 19.47% and ROA from 0.86% to 2.08%.
• Kotak Mahindra Bank maintains strong profitability with ROE rising from
13.84% to 14.88% and ROA from 2.05% to 2.59%.
• HDFC Bank’s ROE has slightly declined from 15.35% to 13.81%, while ROA
remained relatively stable.
• SBI has improved its ROE from 10.0% to 17.0% and ROA from 0.48% to
0.90%, indicating enhanced profitability.
• Net Interest Margin (NIM):
• Kotak Mahindra Bank leads with the highest NIM, increasing from 4.13% to
4.54%.
• ICICI Bank’s NIM improved from 3.14% to 3.79%.
• HDFC Bank’s NIM decreased from 3.67% to 3.00%.
• SBI’s NIM saw a slight increase from 2.90% to 3.10%.
• Cost Efficiency:
• HDFC Bank maintains the lowest cost-to-income ratio, indicating high
operational efficiency.
• ICICI Bank has improved its cost-to-income ratio from 68.03% to 60.39%.
• Kotak Mahindra Bank’s cost-to-income ratio increased from 59.44% to
63.97%, suggesting rising operational costs.
• SBI improved its cost efficiency, reducing the ratio from 53.0% to 50.0%.
• CASA Ratio:
 • Kotak Mahindra Bank’s CASA ratio decreased from 56% to 52%.
• ICICI Bank improved its CASA ratio from 45.0% to 46.0%.
• HDFC Bank’s CASA ratio declined from 42.23% to 38.18%.
• SBI’s CASA ratio slightly decreased from 45.0% to 44.0%.

Conclusion
• ICICI Bank has demonstrated remarkable improvement in profitability and
operational efficiency over the past five years.
• Kotak Mahindra Bank maintains strong profitability and the highest NIM
among peers but faces challenges in cost efficiency.
• HDFC Bank continues to exhibit strong operational efficiency but has seen
slight declines in profitability metrics.
• SBI has improved its profitability and cost efficiency, narrowing the gap with
private sector peers.

Question 1)How strong is each bank in handling financial risks?

Answer- To evaluate how well each bank handles financial risks, we assess the following
areas:
• Asset Quality – Gross NPA ratio
• Profitability – Return on Equity (ROE) & Return on Assets (ROA)
• Operational Efficiency – Cost-to-Income Ratio
• Funding Strength – CASA Ratio

1.Kotak Mahindra Bank – Highly Profitable, Cautious Lending

• Asset Quality: GNPA at 1.39%, very low
• Profitability: High ROA (2.59%) and ROE (14.88%)
• Efficiency: Cost-to-income increased to 63.97%
• CASA Ratio: Highest at ~52%

Strength: Conservative and efficient risk-taking, excellent profitability.

Weakness: Rising operating costs could pressure margins.

2.HDFC Bank – Best Overall Risk Management

• Asset Quality: Lowest GNPA at 1.33%
• Profitability: ROE stable at ~13.81%, ROA ~1.68%
• Efficiency: Best cost-to-income ratio at 40.17%
• CASA Ratio: ~38.18% (decent but slightly declined)

Strength: Extremely strong in credit risk management and operational control.

Weakness: Slight dip in profitability and CASA.
3. ICICI Bank – Rapid Risk & Profitability Improvement
 • Asset Quality: GNPA at 1.96%, improved significantly
• Profitability: ROE 19.47% (highest), ROA 2.08%
• Efficiency: Improved cost-to-income to 60.39%
• CASA Ratio: Strong at 46%

Strength: Outstanding transformation in profitability and risk controls.

Weakness: Still catching up to HDFC/Kotak in asset quality.
4. SBI – Improving, but Still Lagging
• Asset Quality: Highest GNPA at 2.24%
• Profitability: ROE at 17.0%, ROA at 0.90%
• Efficiency: Cost-to-income ~50%
• CASA Ratio: Solid at 44%

Strength: Strong public sector recovery, solid CASA.

Weakness: Asset quality and efficiency still below top private banks.

Risk Handling Strength Ranking (Best to Moderate):

1. HDFC Bank – Most consistent in credit and operational risk control
2. Kotak Mahindra Bank – Excellent asset quality and profitability, with rising
costs
3. ICICI Bank – High risk-adjusted returns and rapid improvement
4. SBI – Stable and improving, but relatively weaker on credit quality.

Question 2)Which bank has the highest profitability?

Answer- Based on the data from FY2020 to FY2024, ICICI Bank has the highest
profitability among the four banks compared (Kotak Mahindra, HDFC, ICICI, and SBI), as
reflected by both key profitability metrics:

1. Return on Equity (ROE) – Measures how effectively equity capital is used to generate
profits:
• ICICI Bank: 9.72% → 19.47% (Highest)
• SBI: 10.0% → 17.0%
• Kotak Mahindra Bank: 13.84% → 14.88%
• HDFC Bank: 15.35% → 13.81%

ICICI Bank leads with the most substantial growth and highest final ROE.
2. Return on Assets (ROA) – Indicates how efficiently a bank uses its assets to generate net
income:
• ICICI Bank: 0.86% → 2.08% (Highest)
• Kotak Mahindra Bank: 2.05% → 2.59% (higher but more stable)
• HDFC Bank: 1.71% → 1.68%
• SBI: 0.48% → 0.90%

Kotak Mahindra Bank has consistently strong ROA, but ICICI Bank shows the most
significant improvement in both ROA and ROE.

Verdict:

ICICI Bank is currently the most profitable bank in this group, thanks to rapid gains in
efficiency, higher returns on equity and assets, and improved margins.

Question 3)Which bank has the lowest bad loans (NPAs)?

Answer- As of the latest available data for FY2024, HDFC Bank has the lowest level of bad
loans among the four banks analyzed, as indicated by its Gross Non-Performing Assets
(GNPA) ratio.

Summary
• HDFC Bank: With a GNPA of 1.33%, HDFC Bank has the lowest level of bad
loans among the peers.
• Kotak Mahindra Bank: Close behind, Kotak Mahindra Bank reports a GNPA
of 1.39%.
• ICICI Bank: Higher GNPA at 1.96%.
• SBI: Highest GNPA among the four at 2.24%, though it’s the lowest for SBI
in the past 10 years.

Therefore, HDFC Bank currently maintains the healthiest asset quality among the four banks
analyzed.
STEP 3
Comparing Kotak Mahindra Bank, SBI, HDFC Bank, and ICICI Bank based on key
financial metrics for FY24.

1.Profitability Metrics

Graphical Comparison:
2. Risk Metrics

Graphical Comparison:
3. Liquidity & Efficiency Metrics

Graphical Comparison:

Analyze which bank is performing best based on these ratios

1. Profitability Analysis (ROA, ROE, NIM)

● Kotak Mahindra has the best ROA (more profit per asset).

● SBI has the highest ROE (best shareholder returns).

● ICICI Bank has the best NIM (strong interest income.

2. Risk Analysis (Gross NPA, Net NPA, PCR, CAR)

● HDFC Bank has the lowest NPAs (safest loan book).

● Kotak Mahindra has the highest

● Capital Adequacy Ratio (strongest capital base).

● ICICI Bank has the best Provision Coverage Ratio (safest provisioning).

3. Liquidity & Efficiency Analysis (CASA, CD Ratio, Cost-to-Income Ratio)

● Kotak Mahindra has the highest CASA ratio (strong low-cost deposit base).

● SBI has the best (lowest) credit-deposit ratio, meaning better liquidity.

● ICICI Bank has the lowest cost-to-income ratio (most efficient operations).

Winner:
 ICICI Bank is overall the best performer, followed by Kotak Mahindra

Final Conclusion

● ICICI Bank → Most balanced and efficient overall.

● Kotak Mahindra Bank → Strongest on capital and deposit quality.

● HDFC Bank → Safest loans, but profitability a bit lower.

SBI → High returns on equity but needs to improve efficiency and asset quality.

Comparative Financial Analysis Report

Banks: HDFC Bank, ICICI Bank, SBI, Kotak Mahindra Bank (FY 2023–24)

1. Key Financial Ratios Explained Simply

2. Financial Performance Data

3. Visual Comparison: Charts

Here are the comparison charts for HDFC Bank, ICICI Bank, SBI, and Kotak Mahindra
Bank:
• Profitability Chart: Net Profit Margin, ROA, and ROE
• Asset Quality Chart: Gross NPA (%)
• Capital Strength Chart: CAR (%)
• Operational Efficiency Chart: Cost-to-Income Ratio (%)
4. Insights: Which Bank Is Strongest Financially?

Final Conclusion:

HDFC Bank and ICICI Bank are the strongest overall.

• ICICI Bank is most profitable (best ROA and ROE).
• HDFC Bank is most efficient and has best loan quality.
• Kotak Mahindra Bank is extremely safe due to highest CAR but slightly lower
profitability.

Overall Winner (Balanced View):

• HDFC Bank (strong profits, low NPAs, efficient operations).
Observations

1. Profitability Performance
• ICICI Bank emerged as the most profitable bank with the highest Return on
Equity (ROE) at 19.47% and Return on Assets (ROA) at 2.08%. This was largely due to its
robust credit growth, cost optimization, and digital efficiency.
• Kotak Mahindra Bank maintained a strong profitability position with a ROA
of 2.59% and ROE of 14.88%, supported by its industry-leading Net Interest Margin (NIM)
of 5.28%, reflecting highly efficient lending practices.
• HDFC Bank, despite a massive merger with HDFC Ltd., reported stable
earnings (ROE: 13.81%, ROA: 1.68%), though merger-related costs temporarily affected
margins and efficiency.
• SBI, while showing significant improvement, still lagged behind with a ROA
of 0.90% and ROE of 17.0%, though it achieved its highest profit levels to date, signaling
better capital utilization.

2. Asset Quality
• HDFC Bank demonstrated the best asset quality with the lowest Gross NPA
(GNPA) at 1.33% and Net NPA at 0.33%, showing tight credit appraisal and recovery
mechanisms.
• Kotak Mahindra Bank and ICICI Bank also maintained low GNPAs (1.4% and
1.96%, respectively) and high Provision Coverage Ratios (PCR) above 80%, indicating
robust buffers against bad loans.
• SBI, though improved, had the highest GNPA at 2.24%, which, while the
lowest in a decade for SBI, still reflects relatively higher credit risk compared to its private
sector counterparts.

3. Liquidity and Capital Adequacy

• Kotak Mahindra Bank had the strongest Capital Adequacy Ratio (CAR) at
20.5%, indicating a solid buffer to absorb shocks and fuel growth.
• HDFC Bank and ICICI Bank also maintained high CARs at 18.8% and
16.33%, respectively, showing strong financial resilience.
• SBI’s CAR, while lower at 14.28%, was still well above regulatory
requirements, ensuring capital stability.
• In terms of CASA Ratio (a measure of low-cost funding):
• Kotak led with 45.5%
• ICICI and SBI followed closely with around 44–46%
 • HDFC Bank’s CASA dropped slightly post-merger to 38.2%, though still
healthy.

4. Operational Efficiency
• ICICI Bank reported the lowest cost-to-income ratio (32.56%), indicating
highly efficient operations.
• HDFC Bank, despite a rise in the cost-to-income ratio post-merger (59.98%),
continued to maintain strong process integration.
• SBI’s cost-to-income rose temporarily to 60% due to wage arrears but is
expected to normalize.
• Kotak Mahindra Bank had a moderate cost-to-income ratio of 45.99%,
reflecting disciplined spending.

5. Regulatory and Strategic Developments

• HDFC Bank and ICICI Bank were both reaffirmed as Domestic Systemically
Important Banks (D-SIBs), with added capital buffer requirements.
• Kotak Mahindra Bank faced temporary RBI restrictions in 2024 over IT
infrastructure lapses but responded effectively with system upgrades and resumed digital
onboarding by early 2025.
• SBI continued its leadership in financial inclusion through initiatives like
YONO and Jan Dhan Yojana, with an unmatched rural and semi-urban reach.
Conclusion

The comparative financial analysis reveals tha

•ICICI Bank is currently the best all-round performer, with outstanding improvements in
profitability, operational efficiency, and asset quality. Its digital strategy and prudent risk
management make it a leading private sector bank.

•Kotak Mahindra Bank is the most conservative yet stable, with the strongest capital base,
high profitability, and excellent deposit mix, although its operating costs are rising.

•HDFC Bank, despite the challenges of a complex merger, remains India’s safest bank with
the lowest NPAs, a broad customer base, and a forward-looking approach in digital and ESG
domains.

•State Bank of India (SBI), though improving across key parameters, still lags behind private
peers in efficiency and asset quality. However, its scale, inclusive banking focus, and digital
innovations continue to make it a vital pillar of the Indian banking system.

Final Ranking (Overall Performance – FY 2023–24)

1.ICICI Bank – Most profitable and efficient. 2.HDFC Bank – Strongest on credit risk
and operations.
3.Kotak Mahindra Bank – Best capital and deposit structure.
4.SBI – Largest in size with solid progress, but improvement needed in asset quality.
Objectives
1. To analyze and interpret key financial ratios used in the banking industry to
assess profitability, asset quality, capital adequacy, liquidity, and operational efficiency.
2. To compare the financial performance of leading Indian banks—State Bank of
India (SBI), HDFC Bank, ICICI Bank, and Kotak Mahindra Bank—using both quantitative
metrics and qualitative insights from annual reports and RBI publications.
3. To understand the relationship between financial ratios and banking
operations, and how metrics like NIM, ROA, ROE, GNPA, CASA, and CAR reflect the
banks’ financial health and operational efficiency.
 4. To study the impact of RBI regulations and strategic developments, including
mergers, technology adoption, systemic importance (D-SIB status), and digital transformation
initiatives on bank performance.
5. To identify strengths and weaknesses in the risk-handling capabilities of each
bank, evaluate their credit risk practices, cost structures, and capital deployment strategies.
6. To conclude which bank is the most resilient and profitable, and provide
recommendations based on financial performance indicators for future improvement and
investment decisions.

Observations

1. Profitability Performance
• ICICI Bank emerged as the most profitable bank with the highest Return on
Equity (ROE) at 19.47% and Return on Assets (ROA) at 2.08%. This was largely due to its
robust credit growth, cost optimization, and digital efficiency.
• Kotak Mahindra Bank maintained a strong profitability position with a ROA
of 2.59% and ROE of 14.88%, supported by its industry-leading Net Interest Margin (NIM)
of 5.28%, reflecting highly efficient lending practices.
• HDFC Bank, despite a massive merger with HDFC Ltd., reported stable
earnings (ROE: 13.81%, ROA: 1.68%), though merger-related costs tempoarily affected
margins and efficiency.
• SBI, while showing significant improvement, still lagged behind with a ROA
of 0.90% and ROE of 17.0%, though it achieved its highest profit levels to date, signaling
better capital utilization.

2. Asset Quality
• HDFC Bank demonstrated the best asset quality with the lowest Gross NPA
(GNPA) at 1.33% and Net NPA at 0.33%, showing tight credit appraisal and recovery
mechanisms.
• Kotak Mahindra Bank and ICICI Bank also maintained low GNPAs (1.4% and
1.96%, respectively) and high Provision Coverage Ratios (PCR) above 80%, indicating
robust buffers against bad loans.
• SBI, though improved, had the highest GNPA at 2.24%, which, while the
lowest in a decade for SBI, still reflects relatively higher credit risk compared to its private
sector counterparts.

3. Liquidity and Capital Adequacy

• Kotak Mahindra Bank had the strongest Capital Adequacy Ratio (CAR) at
20.5%, indicating a solid buffer to absorb shocks and fuel growth.
• HDFC Bank and ICICI Bank also maintained high CARs at 18.8% and
16.33%, respectively, showing strong financial resilience.
 • SBI’s CAR, while lower at 14.28%, was still well above regulatory
requirements, ensuring capital stability.
• In terms of CASA Ratio (a measure of low-cost funding):
• Kotak led with 45.5%
• ICICI and SBI followed closely with around 44–46%
• HDFC Bank’s CASA dropped slightly post-merger to 38.2%, though still
healthy.

4. Operational Efficiency
• ICICI Bank reported the lowest cost-to-income ratio (32.56%), indicating
highly efficient operations.
• HDFC Bank, despite a rise in the cost-to-income ratio post-merger (59.98%),
continued to maintain strong process integration.
• SBI’s cost-to-income rose temporarily to 60% due to wage arrears but is
expected to normalize.
• Kotak Mahindra Bank had a moderate cost-to-income ratio of 45.99%,
reflecting disciplined spending.

5. Regulatory and Strategic Developments

• HDFC Bank and ICICI Bank were both reaffirmed as Domestic Systemically
Important Banks (D-SIBs), with added capital buffer requirements.
• Kotak Mahindra Bank faced temporary RBI restrictions in 2024 over IT
infrastructure lapses but responded effectively with system upgrades and resumed digital
onboarding by early 2025.
• SBI continued its leadership in financial inclusion through initiatives like
YONO and Jan Dhan Yojana, with an unmatched rural and semi-urban reach.

Conclusion

The comparative financial analysis reveals that:

• ICICI Bank is currently the best all-round performer, with outstanding
improvements in profitability, operational efficiency, and asset quality. Its digital strategy and
prudent risk management make it a leading private sector bank.
• Kotak Mahindra Bank is the most conservative yet stable, with the strongest
capital base, high profitability, and excellent deposit mix, although its operating costs are
rising.
• HDFC Bank, despite the challenges of a complex merger, remains India’s
safest bank with the lowest NPAs, a broad customer base, and a forward-looking approach in
digital and ESG domains.
 • State Bank of India (SBI), though improving across key parameters, still lags
behind private peers in efficiency and asset quality. However, its scale, inclusive banking
focus, and digital innovations continue to make it a vital pillar of the Indian banking system.

Final Ranking (Overall Performance – FY 2023–24)

1. ICICI Bank – Most profitable and efficient.
2. HDFC Bank – Strongest on credit risk and operations.
3. Kotak Mahindra Bank – Best capital and deposit structure.
4. SBI – Largest in size with solid progress, but improvement needed in asset
quality.