3 Banks that hold the ‘Highest Cash’ on the Books! | Techy Kings

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The banking space has been one of the best performers during the overall broader market rally underway. While the index is up 19.5% from its June 2022 low, it is up 27.8% over the same period. That’s an excellent performance, and so investors have been hunting down some of the strongest banks for their portfolios.

Although there are incalculable parameters to measure the financial strength of a bank, here I have listed 3 banks with the highest cash and equivalents (as of FY22) which is one of the most important items in a company’s balance sheet. This includes cash (including foreign currency notes and ) & balances with Reserve Bank of Indiabalance with the bank and money on call and short notice.

State Bank of India Limited

The first in the list is the country’s largest public sector bank, State Bank of India (NS:) which has a market capitalization of INR 5,12,093 crores and recorded a net profit of INR 4,06,937.09 crores in FY22 which is the highest ever and subsequently the profits increased 57.88% YoY to INR 35,373.88 crores.

The bank trades at a P/E ratio of 14.48, compared to a sector average of 21.45, while the P/B ratio stands at 1.62. On top of that, the stock is also quoted on 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 came close to this figure.

ICICI Bank Limited

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

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

HDFC Bank Limited

The last name in the list is India’s largest private bank, HDFC Bank (NS:) which has a market capitalization of INR 8,34,294 crores. Despite being one of the investors’ favourites, the share price has remained flat for almost 2 years. Nevertheless, the bank is growing at a good rate, having a 5-year profit CAGR of 20.02%. This was a huge success considering the size of the bank.

The stock trades at a P/E of 21.92 and has FII holdings 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.

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