HDFC Bank vs ICICI Bank – Which Is The Better Private Bank?

HDFC Bank vs ICICI Bank

Embarking on the financial battlefield of Indian banking, the clash of HDFC Bank vs ICICI Bank unfolds as a captivating saga for investors.


Both performed well in the rough patch of banking stocks in India.  

HDFC Bank vs ICICI Bank

In the intricate realm of branch expansion, customer acquisition, and quarterly results, the question looms large i.e. HDFC Bank vs ICICI Bank- Which reigns supreme among private banks?

Join us as we unravel the factors that distinguish these financial titans, seeking which is the better private bank.

Let’s begin! 

(A) HDFC Bank vs ICICI Bank: Comparing the Profiles

First of all, let’s look at the outlines of both companies.

(A.1) HDFC Bank

HDFC Bank Limited, commonly known as HDFC, operates as an Indian banking and financial services company with its headquarters in Mumbai. As of August 2023, it stands as India’s largest private sector bank in terms of assets and is globally ranked as the fifth-largest bank by market capitalization. 

This position was solidified after the acquisition of its parent company, HDFC. Recognized for its significant size, the Reserve Bank of India has designated HDFC Bank as a Domestic Systemically Important Bank (D-SIB). Established in August 1994 following regulatory approval, the bank commenced operations in January 1995. 

Presently, with a market capitalization of $150 billion (as of September 6, 2023), HDFC Bank holds the third-largest position among companies listed on Indian stock exchanges. Additionally, it stands as the sixteenth largest employer in India, boasting a workforce of nearly 1.73 lakh employees.

(A.2) ICICI Bank

ICICI Bank Limited, a Mumbai-based Indian multinational bank and financial services company, maintains its registered office in Vadodara. Offering an extensive array of banking and financial services to both corporate and retail customers, the bank operates through various delivery channels and specialized subsidiaries dealing with investment banking, life and non-life insurance, venture capital, and asset management. 

With a vast network of 5,900 branches and 16,650 ATMs spanning India, the bank’s influence extends to 17 countries. 

Subsidiaries in the United Kingdom and Canada, branches in the United States, Singapore, Bahrain, Hong Kong, Qatar, Oman, Dubai International Finance Centre, China, and South Africa, along with representative offices in the United Arab Emirates, Bangladesh, Malaysia, and Indonesia, showcase the global reach of ICICI Bank. 

Additionally, the bank’s UK subsidiary has branched out into Belgium and Germany.

(A.3) HDFC Bank vs ICICI Bank: A Brief Overview

ParticularsHDFC Bank LimitedICICI Bank Limited
Type of CompanyPublicly ListedPrivate Development Finance Institution
but Publicly Listed
BSE: 500180
BSE SENSEX Constituent
NSE NIFTY 50 Constituent
BSE: 532174
BSE SENSEX Constituent
NSE NIFTY 50 Constituent
IndustryFinancial ServicesFinancial Services
FoundedAugust 1994 (29 years ago)
(via the merger between HDFC-HDFC bank)
January 1994
HeadquartersMumbai (Maharashtra, India)Mumbai (Maharashtra India),
Registered Office- Vadodara, Gujarat
Area ServedIndiaWorldwide
Key PeopleAtanu Chakraborty (Chairman),
Sashidhar Jagdishan (CEO)
Girish Chandra Chaturvedi (Chairman),
Sandeep Bakhshi (MD & CEO)
ProductsCredit cards
Consumer banking
Commercial banking
Finance and insurance
Investment banking
Mortgage loans
Private banking
Private Equity
Wealth management
Credit cards, 
Equities trading, 
Investment management,
Mortgage loans, 
Mutual funds, 
Private equity, 
Risk management, 
Wealth management,
Asset Management
SubsidiariesHDFC Life
HDFC Securities
HDFC Asset Management Company
HDFC Mutual Fund
HDB Financial Services
HDFC Credila Financial Services Limited
ICICI Prudential
ICICI Lombard
ICICI Securities
ICICI Direct
ICICI Home Finance Company
HDFC Bank vs ICICI Bank: A Brief Overview

When comparing HDFC Bank and ICICI Bank, it’s essential to consider various factors. Recent reports indicate that ICICI Bank has been showing remarkable progress across several parameters and has surpassed HDFC Bank in net interest income and profit growth. 

On the other hand, InCred Equities prefers HDFC Bank over ICICI Bank due to its superior ground presence and faster customer acquisition. Despite this, HDFC Bank continues to be the larger of the two lenders, but ICICI Bank is closing the gap. 

It’s clear that both banks have their strengths, and the choice between the two may depend on specific priorities and preferences.

Go through the next section to get detailed information.

(B) HDFC Bank v ICICI Bank: Financial Comparison

Now, let’s see how both these banking titans have performed financially in the fiscal year 2023-

Financial Aspects (FY23)HDFC BankICICI Bank
Market CapitalizationRs.12.51 trillionRs.7.26 trillion
RevenueRs.2.05 lakh crore
($26 billion)
Rs.186,178.80 crore
($23 billion)
Operating IncomeRs.61,498.39 crore
($7.7 billion)
Rs.53,196.39 crore
($6.7 billion)
Net IncomeRs.45,997.11 crore
($5.8 billion)
Rs.34,036.64 crore
($24.3 billion)
ProfitRs.34,16,310 crore
(Before Tax)
(Net Profit)
Total AssetsRs.25.3 lakh crore
($320 billion)
Rs.1,958,490.50 crore
($250 billion)
Total EquityRs.2.85 lakh crore
($36 billion)
Rs.214,497.80 crore
($27 billion)
Number of Employees1,77,000130,542
HDFC Bank vs ICICI Bank: Financial Comparison

(C) HDFC Bank vs ICICI Bank: Which one is a better investment option?

To understand that, you need to go through the following table-

CriteriaHDFC BankICICI Bank
Gross NPAStable (1.1%-1.42% over 24 quarters)Improved (Dropped by 518 basis points over 24 quarters)
Loan Growth17%18.7%
Net Interest Margin4.3% (Consistent)4.9% (Improved by 163 basis points over the last 24 quarters)
Net Interest Income GrowthConsistent GrowthOutperformed HDFC Bank on a year-on-year basis
Net Profit (Q4 FY23)Rs.12,595 croreRs.9,122 crore
Net Interest Income (Q4 FY23)Rs.23,352Rs.17,667 crore
Gross NPA (QoQ Change)1.12%-11 bps2.81%-26 bps
Net NPA (QoQ Change)0.27%-6 bps0.48%-7 bps
Deposit Growth (YoY)20.8%10.9%
Return on Asset (RoA)Stable (1.8% – 2.1% for the last 14 quarters)Significant improvement, reaching 2.39% in Q4 FY23
Branch Network GrowthOver 47% between Q3 FY20 and Q4 FY23Only 11.85% growth between Q3 FY20 and Q4 FY23
HDFC Bank vs ICICI Bank: Which one is a better investment option?

Here are some key takeaways from the table-

(C.1) HDFC Bank

  • Consistent loan growth
  • Stable net interest margin
  • Robust net profit and net interest income
  • Unmatched deposit growth
  • Proven track record in maintaining asset quality

(C.2) ICICI Bank

  • Higher YoY loan growth
  • Improved net interest margin over the last 24 quarters
  • Strong Q4 FY23 performance
  • Significant improvement in return ratios
  • Growing presence in the banking sector

(C.3) Which one is a better investment option- HDFC Bank vs ICICI Bank?

When considering your investment options between HDFC Bank and ICICI Bank, it’s essential to weigh their unique attributes. HDFC Bank boasts consistent loan growth, unmatched deposit growth, and a stable net interest margin. Meanwhile, ICICI Bank presents higher YoY loan growth, improved net interest margins, and a strong Q4 FY23 performance.

To make the right choice, align these factors with your risk tolerance and investment goals. If you prioritize stability and proven performance, HDFC Bank might be your go-to. 

On the other hand, if you seek growth potential and improved ratios, ICICI Bank could be the preferred option. It all boils down to what aligns best with your individual investment strategy.

(D) Why Does InCred Equities Prefer HDFC Bank over ICICI Bank?

Well, that’s not just a heading but a headline that created buzz in the market!

What is InCred Equities? You may ask.

 InCred Equities is a part of the InCred Group, which is a leading diversified financial services company that offers equities research and trading services to a wide range of clients, including institutions, corporates, and Ultra-High/High-Net-Worth Individuals. The company strongly focuses on delivering tailor-made financial solutions. InCred Group operates in the BFSI space through various entities, such as InCred Finance in Lending and InCred Capital in Wealth and Asset Management.

Okay. How did InCred Equities come to such a conclusion? 

Curious to know why? Go through the table below that shows the comparative analysis made by InCred Equities-

Factors for PreferenceHDFC BankICICI Bank
Granular Branch ExpansionAggressive expansion with 2,213 branches in 2 yearsSlower branch growth with 634 branches added  
Faster Customer AcquisitionSuperior ground presence and quicker acquisitionRelatively slower customer acquisition
Market Share DominanceHigher market share in credit card issuances and spendsSlightly lower market share in these categories
Cross-Selling OpportunitiesEnvisaged significant opportunities post-mergerFocussed more in mining existing customer base
Reasons: Why does InCred Equities prefer HDFC Bank over ICICI Bank?

Sounds complicated? Let me explain it in simple terms.

Let’s look at the factors one by one-

  • Granular Branch Expansion: HDFC Bank has undertaken a more aggressive branch expansion strategy, adding 2,213 branches in the past two years, providing a first-mover advantage in rural areas.
  • Faster Customer Acquisition: InCred notes HDFC Bank’s superior ground presence and faster customer acquisition, which contributes to diversified and deeply penetrated growth with a sticky customer base.
  • Market Share Dominance: HDFC Bank has exhibited dominance in credit card issuances and spending, holding a higher market share compared to ICICI Bank.
  • Cross-Selling Opportunities: Post the merger with HDFC Limited, InCred envisions significant cross-sell opportunities for HDFC Bank among its existing mortgage customers, potentially aiding retail growth.

Thus, these factors led to InCred Equities’ preference for HDFC Bank over ICICI Bank in their investment analysis.

(E) HDFC Bank vs ICICI Bank: Which is the better private bank?

Choosing between HDFC Bank and ICICI Bank as the better private bank depends on various factors, each having its strengths and considerations.

Below, we have presented a comparative analysis of HDFC Bank vs ICICI Bank. This will help you evaluate which one might be considered the better private bank-

CriteriaHDFC BankICICI BankAnalysis
Loan GrowthConsistentHigher YoY growthIf you prioritize a bank with steady and reliable loan growth, HDFC Bank might be more suitable. However, if you seek higher growth potential, ICICI Bank could be appealing.
Net Interest Margin (NIM)Stable (4% – 4.4%)Improved by 163 basis points over 24 quartersHDFC Bank provides a stable NIM, while ICICI Bank has successfully enhanced its margin, reflecting a positive trajectory.
Net Profit₹12,595 crore (Q4 FY23)₹9,122 crore (Q4 FY23)HDFC Bank demonstrates higher profitability in the given quarter, indicating robust financial performance.
Net Interest Income₹23,352 crore (Q4 FY23)₹17,667 crore (Q4 FY23)HDFC bank earned more profits compared to ICICI bank in the same quarter
Gross NPA RatioStable between 1.1% and 1.42% over 24 quartersSignificant improvement, dropped by 518 basis pointsBoth banks exhibit sound asset quality, but ICICI Bank’s notable improvement indicates effective management of non-performing assets.
Deposit Growth20.8% YoY to ₹18.83 lakh crore10.9% YoY to ₹11.8 lakh croreHDFC Bank outpaces ICICI Bank in deposit growth, reflecting strong customer trust and confidence.
Operating ExpensesIncreased by 32.3% in Q4 FY23 due to branch expansionQuarterly OPEX per branch slightly higher than HDFC BankHDFC Bank’s branch expansion strategy contributes to increased operating expenses, while ICICI Bank maintains a relatively lower branch growth.
Market Performance (Last 6 Months)Shares rose by over 16%Shares down over 2%, underperforming compared to HDFC BankHDFC Bank’s better market performance over the last six months indicates higher investor confidence.
HDFC Bank vs ICICI Bank: Which is the better private bank?

Considering the factors discussed, both banks have their merits. HDFC Bank stands out with its stable performance, strong deposit growth, and market confidence. 

On the other hand, ICICI Bank portrays higher growth potential, improved asset quality, and profitability. 

Your choice should align with your investment goals, risk tolerance, and preference for stability or growth. It’s advisable to monitor these factors over time for a more informed decision.

Note: Do you know there are numerous small finance banks in India that are doing great in the rural and semi-urban areas? Visit the article on “Top 10 small finance banks in India” for detailed information.

(F) Final Judgment on HDFC Bank vs ICICI Bank: Who is the winner?

In a nutshell, both HDFC Bank and ICICI Bank have their own strengths. HDFC Bank is like a steady ship with consistent profits and strong deposits. On the other hand, ICICI Bank is like a growing tree, showing potential for more profits and better quality. 

The choice between them depends on what you want – a solid and stable option or a bank with growth opportunities. It’s like choosing between a reliable old friend and a friend who’s always up for something new. 

So, take your pick based on what suits your needs and plans for the future!

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Published By: Supti Nandi
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