Indian Banks HDFC vs. ICICI

Difference between Indian Banks HDFC and ICICI

HDFC and ICICI are two of the most outstanding names in India’s privately owned banks. This is because the banks are able to compete on the same measure with government owned banks. Part of their success can be attributed to their efficiency that allows them cut on cost and offer innovative services to the customers.

HDFC Bank Ltd.

Immediately after RBI allowed private entities to own banks in 1994, HDFC was formed.  The major shareholder of the bank is the Housing Development Corporation of India, and is the reason why the bank is still called HDFC Bank. The founder of the bank is Bibu Verghese and the bank’s headquarters are in Mumbai. The end of years result for the bank for the year 2010 showed the bank reporting a profit of $658 million and operating incomes of $958 million. From the inception, the bank has acquired Times Bank Limited, and Centurion Bank of Punjab increasing the firms’ capital base and assets. The bank has 1700 branches in India and over 5000 ATM’s.

ICICI Bank

This is the second largest privately owned bank in India by capital base. The bank started as the Industrial Credit and Investment Corporation of India. The bank operates both in India and 18 other countries and has more than 2000 branches and 5000 ATM’s in the countries it operates from. The bank services both the retail and corporate clientele apart from being a successful life insurance provider (ICICI Prudential), venture capital company (ICICI Direct) and offering asset management services. Other successes of the bank include being the largest home loan provider in India and also the number one credit cards provider. The company has a presence in, more than 19 countries in the world. The bank has a bad reputation of employing goons to recover its money from loan defaulters and has severally been taken to court by different consumer forums due to this.

Both banks are highly successful and are continuously in investing in cost cutting technology to boost their efficiency. However, through its brand ambassador, Bachchan, has been successful in selling itself as a reputable brand in India.

Differences between HDFC and ICICI

  • HDFC designs its products for a niche market while ICICI markets to all customers.
  • HDFC has enjoyed the highest growth rate of banks in India at 30% pa whereas ICICI’s growth varies over the years.
  • The PE ratio for HDFC (19%) is higher than that of ICICI (11 %.).
  • ICICI more branches and ATM over the country than does HDFC making it more accessible to clients.
  • Both banks differ in their selected ways of raising equity.
  • ICICI has an internet banking platform that is by far superior to that of HDFC.
  • HDFC’s NPA is 0.2% while ICICI has NPA’s at 2.7% for advances.