3 Banks that hold the ‘Highest Cash’ in Books!

The banking space has been one of the outperformers during the entire broader market rally that is currently going on. While the index is up 19.5% from the June 2022 low, the rallied 27.8% in the same period. That’s a very strong outperformance, and hence investors have been hunting for some of the strongest banks for their portfolios.

While there are uncountable parameters to gauge the financial strength of a bank, here I have listed 3 banks that have the highest cash and equivalents (as of FY22) which is one of the most important items in a company’s balance sheet. These include cash (including foreign currency notes and ) & balances with the Reserve Bank of India, balances with banks and money at call and short notice.

State Bank of India Limited

The first one on the list is the largest public sector bank in the country, State Bank of India (NS:) which has a market capitalization of INR 5,12,093 crores and clocked a net revenue of INR 4,06,937.09 crores in FY22 which is the highest ever and consequently profits rose 57.88% YoY to INR 35,373.88 crores. 

The bank trades at a P/E ratio of 14.48, compared to the sector’s average of 21.45, while the P/B ratio stands at 1.62. To top it all, the stock is also quoting at a dividend yield of 1.24%. In FY22, the bank reported cash and equivalents of INR 3,98,905.12 crores and no other bank comes even close to this figure.

ICICI Bank Limited   

ICICI Bank (NS:) is the next one on the list with a market capitalization of INR 6,33,390 crores. The share price of ICICI Bank cheered investors this year as the stock surged to an all-time high of INR 943.25 last month. Because it’s a private bank, the market generally gives this category a bit more premium valuations than PSU banks, hence it trades at a P/E of 25.22.

In FY22, the bank reported consolidated cash and equivalent at INR 1,83,125 crores. It has also maintained its yearly profit growth rate at 19.77% over the last 5 years, making it one of the best growth stocks in the large-cap category.   

HDFC Bank Limited

The last name on the list is the largest private bank in India, HDFC Bank (NS:) which has a market capitalization of INR 8,34,294 crores. Despite being one of the investors’ favorites, the stock price has remained stagnant for almost 2 years. But still, the bank is growing at a good pace, having a 5-year profit CAGR of 20.02%. This is a big feat considering the gigantic size of the bank.

The stock trades at a P/E of 21.92 and has an FII stake of 32.13%, which has reduced from 39.39% in June 2021. In FY22, the bank reported cash and equivalents of INR 1,55,385.73 crores, making it the third-largest cash-rich bank.