The private banking sector in India has become highly competitive, with major players prioritizing growth, innovation, and digital services. This report compares two major private banks based on their most recent performance and key developments.
Industry Overview
India’s banking sector plays a vital role in economic growth by mobilizing savings and extending credit to individuals and businesses. It comprises public and private banks, foreign banks, and cooperative institutions. Private banks like HDFC Bank and ICICI Bank have seen significant growth in recent years, driven by technology adoption, better asset quality, and customer-focused services.
The Reserve Bank of India (RBI) regulates the sector, which is currently emphasizing financial stability, enhancing digital infrastructure, and managing credit risks amid changing economic conditions.
Below are the two leading Private banks that are growing rapidly. Let’s compare them to know about their performance.
With market capitalization of Rs. 15,18,140.95 crore, HDFC Bank Ltd is trading at Rs. 987.50, and ICICI Bank Ltd, with market capitalization of Rs. 9,63,450.20 crore, is trading at Rs. 1,347.60.
About the companies
HDFC Bank, a leading private-sector bank in India, was among the first to receive RBI approval in 1994. As of June 30, 2025, it operated 9,499 branches and 21,251 ATMs across 4,153 cities, with 51% of branches located in semi-urban and rural areas. Globally, the bank has four branches in Hong Kong, Bahrain, Dubai, and GIFT City, along with five representative offices in Kenya, Abu Dhabi, Dubai, London, and Singapore, primarily focusing on providing housing loans in India.
ICICI Bank, established in 1955 with backing from the World Bank, the Government of India, and Indian industry, started as a development bank. Today, it is a leading Indian multinational bank offering a wide range of financial services to retail and corporate clients. Headquartered in Mumbai, the bank operates 7,066 branches and 13,376 ATMs across India, along with an international presence in 11 countries through branches, subsidiaries, and representative offices.
Comparison of Q2 Financial Results
In Q2FY26, HDFC Bank’s Net Interest Income (NII) grew by 4.8 percent year-on-year from Rs. 30,110 crore to Rs. 31,550 crore. ICICI Bank showed a stronger growth of 7.4 percent, with NII rising from Rs. 20,048 crore to Rs. 21,529 crore. HDFC Bank’s Net Interest Margin (NIM) was 3.27 percent, while ICICI Bank’s was higher at 4.30 percent.
ICICI Bank’s net profit increased by 5.2 percent from Rs. 11,746 crore to Rs. 12,359 crore. HDFC Bank’s profit rose by 10.8 percent from Rs. 16,820 crore to Rs. 18,640 crore. In terms of asset quality, ICICI Bank’s Gross NPA and Net NPA stood at 1.58 percent and 0.39 percent, while HDFC Bank’s were 1.2 percent and 0.4 percent respectively.
HDFC Bank’s CASA deposits grew by 7.4 percent, with savings at Rs. 6,52,700 crore and current account at Rs. 2,96,400 crore, making up the CASA ratio of 34 percent of total deposits. ICICI Bank’s CASA deposits rose by 8.2 percent, with savings at Rs. 4,52,124 crore and current account at Rs. 2,06,747 crore, accounting for the CASA ratio of 39.2 percent of total deposits.
ICICI Bank’s Total advances grew YoY by 10.2 percent from Rs. 12,77,240 crore to Rs. 14,08,456 crore, whereas HDFC Bank’s increased by 8.9 percent from Rs. 26,33,400 crore to Rs. 28,68,800 crore.
Analysts Views
HDFC Bank
Nuvama Institutional Equities has Maintained a Buy rating and raised the target price to ₹1,170 from ₹1,135 upside of 18.48 percent. The brokerage expects NIMs to recover from Q3 FY26 as funding costs normalise and believes the bank’s strong asset quality and improving core earnings will drive outperformance.
BNP Paribas Exane Research has Reiterated an Outperform rating with a higher target price of ₹1,390 upside of 40.76 percent, citing margin recovery potential and strong provision buffers. It highlighted that easing cost of funds and better operating efficiencies led to a PAT beat despite margin pressure.
ICICI Bank
Nuvama Institutional Equities has Maintained a Buy rating with a target price of ₹1,750 upside of 29.86 percent, naming ICICI as its top private lender pick. It noted strong margin resilience, steady asset quality, and sharply normalised credit costs, expecting loan growth to accelerate in H2 FY26 and stable profitability to drive a valuation re-rating.
Elara Securities: Retained a Buy rating with a target of ₹1,707 upside of 26.67 percent, emphasizing resilient earnings and well-managed credit costs.
Deven Choksey Research: Kept an Accumulate rating with a target price of ₹1,593 upside of 18.21 percent, stating that the bank’s premium valuation is justified by its strong margins, robust balance sheet, and sustained retail traction.
Conclusion
HDFC Bank and ICICI Bank continue to show steady growth and strong performance within India’s private banking sector. Each possesses distinct strengths and operates efficiently, reflecting solid fundamentals. Their performance demonstrates the strength of India’s private banking sector, making them worth following in the future.
Written by Akshay Sanghavi
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