The primary components of Total Assets for Banks in India consist of Loans and Advances, Investments, Fixed Assets, and Other Assets. Let's analyze the Assets of the Top 6 Banks in India. Across all six major banks in the country, the highest percentage of Total Assets is attributed to Loans and Advances, ranging between 50-66%. Investments make up 24-35% of the Total Assets, Fixed Assets are below 1%, and Other Assets fall between 9-12%. Typically, the interest earned on Loans and Advances is higher compared to that earned on investments. Therefore, a higher percentage of Loans and Advances could result in a higher return on assets. However, it also comes with a higher default risk, necessitating a balanced approach. According to regulations, all banks must maintain a Cash Reserve Ratio (CRR) and a Statutory Liquidity Ratio (SLR). CRR is the percentage of funds that banks must keep with the RBI in cash form, while SLR is the percentage of funds that banks must invest in the Government Securities. Currently, CRR stands at 4.5% and SLR at 18%.
As of March 31, 2024, the State Bank of India (SBI) had total assets of Rs. 6,733,778 Cr., Bank of Baroda (BoB) had total assets of Rs. 1,654,779 Cr., and Punjab National Bank (PNB) had total assets of Rs. 1,558,809 Cr. on consolidated basis.
SBI's total assets are made up of 56.20% loans and advances, 31.34% investments, 0.66% fixed assets, and 11.79% other assets. Similarly, BoB's total assets consist of 65.81% loans and advances, 24.60% investments, 0.49% fixed assets, and 9.10% other assets. On the other hand, PNB's total assets comprise 59.25% loans and advances, 28.11% investments, 0.78% fixed assets, and 11.87% other assets.
BoB has the highest share of Loans & Advances in its total assets, accounting for 65.81%. On the other hand, it has the lowest share of Investments, Fixed Assets, and Other Assets, which make up 24.60%, 0.49%, and 9.10% respectively, when compared to SBI and PNB. SBI, on the other hand, has the highest percentage of Investments in its Total Assets, with 31.34%, resulting in its Loans and Advances percentage being the lowest at 56.20% when compared to BoB and PNB, which are 24.60% and 28.11% respectively.
If we examine the Total Assets of the leading private banks in India at the same point in time, HDFC Bank had a Total Assets value of Rs. 4,030,194 Cr., ICICI Bank had Rs. 2,364,063 Cr., and Axis Bank had Rs. 1,518,238 Cr. on a consolidated basis.
Breaking down the Total Assets of HDFC Bank, it comprises 63.67% Loans & Advances, 24.95% Investments, 0.31% fixed assets, and 11.07% Other Assets. Similarly, ICICI Bank's Total Assets consist of 53.33% Loans & Advances, 34.99% Investments, 0.56% fixed assets, and 11.17% Other Assets. On the other hand, Axis Bank's Total Assets are composed of 65.82% Loans & Advances, 21.89% Investments, 0.38% fixed assets, and 11.90% Other Assets.
The proportion of Fixed Assets and Other Assets in the Total Assets is relatively similar across all three private sector banks. As a result, the percentages of Loans & Advances and Investments play a crucial role in distinguishing these banks. Among the three, Axis Bank has the highest percentage of Loans & Advances in its total assets at 65.82%, followed by HDFC Bank at 63.67% and ICICI Bank at 53.33%. Conversely, ICICI Bank has the highest percentage of Investments in its total assets at 34.99%, followed by HDFC Bank at 24.95% and Axis Bank at 21.89%.
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Data Source
- Bank’s website
- Moneycontrol.com
Disclaimer
The content or analysis presented in the Blog is exclusively intended for educational purposes. It is important to note that this should not be considered as a suggestion for investing in stocks or as legal or medical advice. It is highly recommended to seek guidance from an expert before making any decisions.