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HDFC, Kotak largest wealth creators

HDFC Bank and Kotak Mahindra Bank have been identified as the largest wealth creators among the private sector banks. The market capitalisation of HDFC Bank at Rs 1.58 lakh crore is equivalent to the market cap of all state-owned banks put together, excluding State Bank of India. The seven private sector banks have created wealth of Rs 4.2 lakh crore with a total investment of Rs 76,500 crore. These banks have registered a compounded annual growth of 28% between FY2000-13. These are the highlights of a report on the banking sector by Motilal Oswal Securities. Six new private sector banks feature among the top 10 banks in market capitalization, says the report. The report says over the last two decades private sector banks have been continuously gaining market share from the state-owned banks. It also expects the private banks to grow further despite intense competition from new banks. Existing private banks have been strengthening their foothold in semi-urban and urban areas, where state-owned banks’ dominance would be challenged, says the report. It also finds that the state-owned banks are struggling to meet the capital requirements and employee-related issues.

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