Newsbytes
  • India
  • Business
  • World
  • Politics
  • Sports
  • Technology
  • Entertainment
  • Auto
  • Lifestyle
  • Inspirational
  • Career
  • Bengaluru
  • Delhi
  • Mumbai
  • Videos
  • Visual Stories
  • Reviews
  • Phone Reviews
  • Fitness Bands Reviews
  • Speakers Reviews
  • Find Cricket Statistics
Hindi
More
In the news
Twitter
Gmail
Reserve Bank Of India (RBI)
Reliance
Sensex
New Labour Laws in India
Newsbytes
Hindi
Newsbytes
User Placeholder

Hi,

Logout


India
Business
World
Politics
Sports
Technology
Entertainment
Auto
Lifestyle
Inspirational
Career
Bengaluru
Delhi
Mumbai
Videos
Visual Stories
Reviews
Phone Reviews
Fitness Bands Reviews
Speakers Reviews
Find Cricket Statistics

More Links
  • Videos

Download Android App

Follow us on
  • Facebook
  • Twitter
  • Linkedin
  • Youtube
 
Home / News / Business News / India offers the best and worst returns in banking
Business

India offers the best and worst returns in banking

India offers the best and worst returns in banking
Written by Shiladitya Ray
May 26, 2018, 12:01 am 2 min read
India offers the best and worst returns in banking

The Indian banking sector is increasingly becoming characterized by contradictory elements. With unprecedented frauds piling on top of surging bad debt, India's state-run banks have had a terrible year. Yet, instead of being scared away, India's newest lenders are boldly offering some of the best returns, and some of India's private sector banks are among the world's most valuable. Here's more.

Profitability
India's AU Small Finance has 5x the average worldwide profitability

Indeed, India's new private commercial banks seem to be having a good time. For instance, AU Small Finance Ltd., which acquired the status of a small finance bank in April 2017, has a return-on-equity (measure of profitability) of a massive 56%. In comparison, the global average is 11.3%. Giants JPMorgan Chase & Co. have a return-on-equity of 11%.

New challengers
AU Small Finance, Bandhan Bank likely to see good growth

AU Small Finance and Bandhan Bank are the latest entrants in the banking sector. Investors seem to be particularly keen to invest, with Singaporean investment firm Temasek Holdings having already purchased a 5% stake in AU worth $147mn. Meanwhile, the Goldman Sachs Group is eyeing a stake in Bandhan Bank. The rural-focused Bandhan is expected to see strong growth ahead of the 2019 elections.

Quote
Risk-averse wholesale banks are opening up market for new banks

"More tellingly, credit challenges faced by wholesale banks have led to them becoming significantly risk averse, opening up a very large market for well capitalised and confident retail banks to aggressively make market share gains," said Edelweiss Securities analyst Aditya Narain.

Bank valuation
HDFC Bank is among the world's top 25 banks

Meanwhile, Indian banking veterans HDFC Bank ranks among the world's top banks in terms of market capitalization. As of January 2018, HDFC Bank had a market capitalization of $88.43bn, and ranked 21st in the world in terms of market cap. Goldman Sachs predicts HDFC will hit $100bn in market cap before 2020. IndusInd Bank and Kotak Mahindra Bank are also slated to grow well.

The dark side
Meanwhile, state-run banks are struggling

On the other hand, following the colossal PNB scam, the Punjab National Bank posted a loss of $2bn, while India's largest lender, the State Bank of India, posted a record net loss of around $1bn. Notably, according to latest data, the larger picture is even bleaker - bad loans across state-run banks in India are more than double their market cap.

Share this timeline
Facebook
Whatsapp
Twitter
Linkedin
Shiladitya Ray
Shiladitya Ray
Mail
Budding social scientist with a keen interest in social studies of science and the sociology of knowledge. Cinephile. Liverpudlian. Metalhead.
Latest
India
Banking
State Bank of India (SBI)
Punjab National Bank
IndusInd Bank
Latest
Aprilia SR Max250 HPE maxi-scooter launched with sporty looks
Aprilia SR Max250 HPE maxi-scooter launched with sporty looks Auto
Samsung rolls out Android 12 update for Galaxy M11
Samsung rolls out Android 12 update for Galaxy M11 Technology
'Stranger Things 4': Series finale aftermath; what all went wrong?
'Stranger Things 4': Series finale aftermath; what all went wrong? Entertainment
2022 Wimbledon: Rafael Nadal reaches fourth round
2022 Wimbledon: Rafael Nadal reaches fourth round Sports
Silence S01+, with sporty looks, revealed: Check features, price
Silence S01+, with sporty looks, revealed: Check features, price Auto
India
New motorcycle launches expected in 2022: Ducati, Harley-Davidson, Suzuki, TVS
New motorcycle launches expected in 2022: Ducati, Harley-Davidson, Suzuki, TVS Auto
Formula E confirms Hyderabad E-Prix for February 2023
Formula E confirms Hyderabad E-Prix for February 2023 Auto
Hero Lectro e-cycles become cheaper thanks to Rs. 15,000 subsidy
Hero Lectro e-cycles become cheaper thanks to Rs. 15,000 subsidy Auto
Bengaluru Airport installs diaper changing room in men's washroom
Bengaluru Airport installs diaper changing room in men's washroom Lifestyle
Who is Mohammed Zubair, journalist arrested for hurting religious sentiments?
Who is Mohammed Zubair, journalist arrested for hurting religious sentiments? India
More News
Banking
ICICI Bank FD interest rates hiked: Check latest rates
ICICI Bank FD interest rates hiked: Check latest rates Business
Some banking rules that will change from next month (October)
Some banking rules that will change from next month (October) Business
Banks closed up to 21 days in October: Check list
Banks closed up to 21 days in October: Check list Business
#NewsBytesExclusive: How the Russian start-up JuicyScore strategizes credit fraud prevention
#NewsBytesExclusive: How the Russian start-up JuicyScore strategizes credit fraud prevention Inspirational
Two-day bank strike from today: These services would be affected
Two-day bank strike from today: These services would be affected Business
More News
State Bank of India (SBI)
India's Q4 GDP pegged at 2.7%, lower than Q3: Experts
India's Q4 GDP pegged at 2.7%, lower than Q3: Experts Business
Bharat Bandh on March 28-29: These services may be hit
Bharat Bandh on March 28-29: These services may be hit India
CBI books Gujarat firm for Rs 22,842 crore loan fraud
CBI books Gujarat firm for Rs 22,842 crore loan fraud Business
ED arrests Shakti Bhog CMD in money laundering case
ED arrests Shakti Bhog CMD in money laundering case India
SBI will charge beyond four free cash withdrawals every month
SBI will charge beyond four free cash withdrawals every month India
More News
Punjab National Bank
Dominica withdraws illegal entry case against Mehul Choksi
Dominica withdraws illegal entry case against Mehul Choksi India
Fugitive diamantaire Mehul Choksi says he may be kidnapped again
Fugitive diamantaire Mehul Choksi says he may be kidnapped again India
Nirav Modi's plea on dismissing fraud allegations rejected by court
Nirav Modi's plea on dismissing fraud allegations rejected by court World
Mehul Choksi remanded to state prison in Dominica
Mehul Choksi remanded to state prison in Dominica World
Top 100 wilful defaulters owe Rs. 84,632 crore to banks
Top 100 wilful defaulters owe Rs. 84,632 crore to banks Business
More News
IndusInd Bank
FinCEN files: All you need to know about the leak
FinCEN files: All you need to know about the leak Business
#DealOfTheDay: Android One-based Mi A3 available with a heavy discount
#DealOfTheDay: Android One-based Mi A3 available with a heavy discount Technology
#FinancialBytes: Best credit cards in India you can apply for
#FinancialBytes: Best credit cards in India you can apply for Business
#FinancialBytes: All you need to know about loans on credit-cards
#FinancialBytes: All you need to know about loans on credit-cards Business
#FinancialBytes: All you need to know about loans on credit-cards
#FinancialBytes: All you need to know about loans on credit-cards Business
More News
Next News Article
Next News Article

Love Business news?

Subscribe to stay updated.

Business Thumbnail
India News Business News World News Politics News Sports News Technology News Entertainment News Auto News Lifestyle News Inspirational News
Career News Bengaluru News Delhi News Mumbai News Mukesh Ambani Indian Premier League (IPL) Karnataka Samsung Xiaomi West Bengal
Bihar Virat Kohli Rohit Sharma Haryana Narendra Modi Arvind Kejriwal Tamil Nadu Gujarat Yogi Adityanath YouTube
Instagram Hollywood News Uttar Pradesh Kerala Netflix Bollywood News Mamata Banerjee Maruti Suzuki Rahul Gandhi Elon Musk
Shah Rukh Khan Chelsea FC OPPO Akhilesh Yadav Indian Cricket Team Apple Manchester United Salman Khan Cryptocurrency OnePlus
Amitabh Bachchan ICC Women's World Cup Vivo India vs Sri Lanka
About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive IPL 2022 Schedule IPL 2022 Points Table Find Cricket Statistics
Follow us on
Facebook Twitter Linkedin Youtube
All rights reserved © NewsBytes 2022