The banking sector is one of the most secure, productive, and popular industries to invest in.
Bank stocks created a huge market in the last few years but yes there is no denying that it sinks during the pandemic. Again it set a comeback with the rapid growth because without the banking industry’s contribution, the economy cannot expand.
So if planning for banking equities to invest in soon, then you can check this list of the best bank stocks to buy in 2022.
List of Best Bank Stocks to Buy in 2022
HDFC is one of the greatest large-cap banking stocks in India in terms of market capitalization. In its sector, HDFC Bank has the highest earnings per share at Rs. 57.9. This bank is at the top of our list of the best bank stocks to purchase because of its excellent performance over the years.
With a market capitalization of $7,59,180.39, HDFC Bank is now the largest bank in India. The stock’s closing price was $1,351.10, while its all-time high and low prices were $1,725.00 and 16.36.
HDFC Bank has consistently delivered outstanding results, increasing strongly through numerous economic cycles, and has long been regarded as a gold standard for excellence.
Given the unprecedented effects of the COVID-19 scenario on numerous firms, it is important to take a deeper look at how its unsecured portfolio performance may be affected.
To combat the situation, HDFC Bank adopted a practical strategy and, starting in FY2019–20, moved its attention to the wholesale banking sector, helping to offset the decline in some retail segments brought on by a general slowdown in consumption.
In order to grow regularly in a prudent way, HDFC Bank pursued a cautious strategy by balancing between both business categories corporate and retail.
In addition to this, since the RBI’s limits on banks’ digital initiatives are no longer in effect, a rise in retail loans might be anticipated, driven by the bank’s aggressiveness to make up lost ground.
ICICI is one of the greatest bank stocks to purchase as it is a large-cap banking stock which gives you promising earnings per share.
This bank’s market capitalization is listed as 5,07,245.27 crore. The stock’s closing price is 720, and its all-time high is 867.00, while its all-time low is 11.41.
Compared to the established companies in the public sector, ICICI bank shows great interest in investment in technology.
In terms of asset size, ICICI Bank is the second largest private sector bank in India and is recognised as one of the D-SIBs (Domestic Systemically Important Banks) in the nation.
As of March 31, 2022, the bank reported a 19.2% Capital Adequacy Ratio (CAR) in accordance with Basel III.
ICICI has consistently maintained a good CASA mix of 45.2 per cent as of March 31, 2021, because of the private lender’s strong retail franchise, which helps mobilise low-cost deposits.
KOTAK MAHINDRA BANK
Kotak Mahindra Bank Ltd functions fairly well in all areas of banking, including investment banking. Thus, it maintains a strong share for investors year after year.
Kotak Mahindra Bank also came to light as a participant who adopted a sensible and cautious strategy, focusing primarily on well-regarded clients and industries.
This contributed to the bank’s historically low levels of bad loan formation (Net NPA at 0.64 per cent). This banking behemoth has grown profits at a CAGR of 19.6% over the course of five years and advances at a CAGR of 7.2% over the course of the same period.
The bank’s deposit business is still granular and strong, with good deposit growth and an industry-leading CASA ratio of 60.7 per cent in Q4FY22.
Axis Bank is one of the best private banks in India with its network of over 4500+ locations.
Axis Bank generates approx. 4 % net interest margin and has a capital adequacy ratio of nearly 19.31 per cent.
The private sector participant has consistently kept healthy capitalization levels, showing a solid capacity to raise capital to support growth and maintain a buffer over minimal regulatory requirements, as well as a strong capacity to raise resources through deposits and bonds.
As of March 31, 2022, Axis Bank’s total deposits increased by 17.7 per cent. As of March 31, 2021, the bank’s CASA deposit base made up a substantial 44.92 per cent of all deposits.
It has been able to control the growth of bad loans as of the quarter that ended on March 31, 2022, and it has reported a Gross NPA ratio of 2.8 per cent and a Net NPA ratio of 0.70 per cent.
Axis bank has a 75 per cent provision coverage ratio. Its capital adequacy ratio is an impressive 15.4%.
Axis Bank currently has the biggest exposure, consisting of 37% from home loans, 11% from LAP, and 11% from auto loans. When COVID-19 is in effect, the lender may be in danger due to their exposure to NBFCs and HFCs.
Indusind Bank is a large-cap company with one of the finest banking companies in terms of earnings per share. It is at the top of our list of the finest bank stocks to purchase.
This bank has a market capitalization of 70,801.17 crore rupees. The stock’s ending price was 913.20, while its all-time high and low prices, respectively, were 2,038.00 and 8.50.
The Bank is able to advance significantly in the field of car financing because of its strong subject expertise and coverage.
Over years, it has been able to control and reduce its problematic loans while consistently growing its profitability and net interest income by double digits.
Under the leadership of recently appointed MD & CEO Mr Sumant Kathpalia, IndusInd Bank is concentrating on growing retail lending, lowering reliance on huge deposits from governments & corporations, and ensuring sustainable liquidity.
At 41.8 per cent, the bank’s CASA ratio ranks among the best among private sector banks in India. As a result of the COVID-19 pandemic, the bank is better able to handle shocks thanks to its provision coverage ratio of 72.3%.
After the Yes Bank scandal, IndusInd Bank saw big deposits from governments and corporations move to larger banks.
Despite this, it was still able to attract the migrated amounts back, citing a 15% YoY increase in the deposit base. The bank has been able to keep its NIMs at 4.2 per cent while slowing the rate of NPA generation (i.e. NNPA at 0.64 per cent).
So here we have covered all the best bank stocks to buy in 2022, few facts and figures might not be the same every time. Hence it’s advised to do your stock market research about present bank stocks’ prices before investing in any bank stocks.
Also, you can ask our experts at Swastika to help you find the best banking stocks to start your hassle-free investment journey.
Open demat account with Swastika to start stock trading, contact us at 0120 4400700.