GROSS NPA RATIO

The Gross NPA (Non-Performing Asset) formula is used to calculate the ratio of non-performing
assets (NPAs) to total loans or assets held by a bank. Here's the formula:

Where:

 Gross NPAs: Total value of non-performing loans (loans where the borrower has failed to
repay interest or principal for a specified period).

 Total Loans or Advances: The total value of all loans or advances given by the bank.

This ratio measures the percentage of the bank's total loan book that is in default, with a higher ratio
indicating a greater portion of loans that are not performing, reflecting potential credit risk.

GROSS NPA RATIOS

Year
HDFC ICICI
2019-20 1.26 6
2020-21 1.32 8
2021-22 1.17 4
2022-23 1.12 2.87
2023-24 1.24 2.26
Minimum 1.12 2.26

Maximum 1.26 8
 GROSS NPA RATIO

9
8
7
6
5
4
3
2
1
0
2019-20 2020-21 2021-22 2022-23 2023-24

RATIOS HDFC RATIOS ICICI

The Gross NPA (Non-Performing Assets) ratio is a measure of the proportion of a bank's loans that
are non-performing (i.e., loans where the borrower has defaulted on payments). A higher Gross NPA
ratio indicates a greater proportion of bad loans, while a lower ratio suggests that the bank is
managing its loan portfolio more effectively.

HDFC Bank:

 2019–2020: The NPA ratio is 1.26%. This suggests that for every ₹100 of loans, ₹1.26 is non-
performing. It's relatively low, indicating HDFC's strong asset quality at that time.

 2020–2021: The NPA ratio increases slightly to 1.32%, which is still very low but shows a
slight deterioration in asset quality compared to the previous year.

 2021–2022: The NPA ratio reduces to 1.17%, improving compared to the previous year,
indicating better asset quality and effective management of non-performing loans.

 2022–2023: The NPA ratio improves further to 1.12%, the lowest point in the period,
showing that HDFC Bank was able to maintain or improve asset quality.

 2023–2024: The ratio slightly rises to 1.24%. Although still low, it suggests a small increase in
non-performing loans relative to total loans.

Key Takeaways for HDFC:

 HDFC Bank's NPA ratios remain consistently low throughout the period, indicating strong
loan management and risk control.

 The ratio fluctuates slightly, but it stays well below critical levels (2-3%), meaning HDFC has
been efficient in handling defaults and maintaining asset quality.

ICICI Bank:

 2019–2020: ICICI's NPA ratio is much higher at 6%. This suggests that a significant portion of
ICICI's loans was non-performing, which could point to higher risk exposure or more
significant loan defaults at the time.

 2020–2021: The NPA ratio rises to 8%, the highest in the period. This signals further
deterioration in asset quality, with a larger proportion of loans defaulting or overdue.
  2021–2022: The NPA ratio improves to 4%, a significant reduction compared to the previous
year, indicating effective strategies to manage bad loans.

 2022–2023: The NPA ratio continues to improve to 2.87%, which is still high compared to
HDFC but a marked improvement from the earlier years.

 2023–2024: The ratio improves again to 2.26%, which is a significant improvement over the
previous years, showing a positive trend in asset quality.

Key Takeaways for ICICI:

 ICICI Bank faced higher NPA ratios during the period, peaking at 8% in 2020-21. However, it
shows significant improvement from that point onward.

 The decline in NPA ratios from 8% to 2.26% in 2023–2024 demonstrates that ICICI has likely
implemented measures to control and reduce non-performing loans, resulting in better asset
quality over time.

Overall Comparison:

 HDFC consistently maintains low NPA ratios (below 2%), demonstrating strong asset quality
and effective risk management.

 ICICI had a higher and more fluctuating NPA ratio, peaking at 8% in 2020–21, but the ratio
gradually decreased, showing improvement in its handling of non-performing loans.

Conclusion:

 HDFC Bank has consistently managed lower levels of non-performing loans, which reflects
positively on its credit risk management and the overall health of its loan book.

 ICICI Bank faced more significant challenges with higher NPA ratios but has made significant
progress in reducing them over the years, showing signs of better management and recovery.

The data highlights the stability of HDFC Bank in managing its loan portfolio, while ICICI Bank has
demonstrated improvement over time after a period of higher risk.

CURRENT RATIO
The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations
with its short-term assets. The formula is:

Where:
  Current Assets: Assets that are expected to be converted into cash or used up within one
year, such as cash, accounts receivable, and inventory.

 Current Liabilities: Obligations or debts that are due within one year, such as accounts
payable, short-term loans, and other short-term debts.

A Current Ratio of 1 or higher generally indicates that a company has enough assets to cover its
short-term liabilities, while a ratio below 1 may indicate potential liquidity problems.

CURRENT RATIOS
Year
HDFC ICICI
2019-20 0.39 1.58
2020-21 0.39 1.59
2021-22 0.5 2.34
2022-23 0.58 1.38
2023-24 0.09 0
Minimum 0.09 1.38
Maximum 0.39 2.34

CURRENT RATIO

2.5

1.5

0.5

0
2019-20 2020-21 2021-22 2022-23 2023-24

RATIOS HDFC RATIOS ICICI

The current ratio is a liquidity metric that measures a company's ability to pay its short-term
liabilities with its short-term assets. A current ratio of less than 1 indicates that the company might
struggle to meet its short-term obligations, while a ratio greater than 1 indicates better liquidity

HDFC Bank Current Ratios:

  2023-24 (0.09): This is extremely low. It suggests that HDFC is struggling to cover its short-
term liabilities with its short-term assets. A ratio of 0.09 indicates a very high risk of liquidity
issues, and it is a sign that the bank may have serious concerns in meeting its immediate
financial obligations.

 2022-23 (0.58): While an improvement compared to 2023-24, the ratio is still below 1, which
indicates that HDFC may still have difficulty covering its short-term liabilities. However, this is
less severe than the ratio in 2023-24.

 2021-22 (0.5): Similar to 2022-23, this ratio indicates that the bank has a liquidity risk. It
suggests that HDFC’s short-term liabilities are still greater than its short-term assets.

 2020-21 (0.39): A very low ratio, indicating significant liquidity risk. HDFC’s short-term
liabilities substantially exceeded its short-term assets, suggesting financial strain or limited
ability to meet obligations without additional financing or asset liquidations.

 2019-20 (0.39): Same as 2020-21, indicating a continued issue with liquidity, with the bank
facing difficulty in covering short-term liabilities.

HDFC’s current ratios are concerning, with values below 1 throughout the years shown, but the ratio
dropped to an alarming level in 2023-24 (0.09). This decline in liquidity is a major risk and indicates
that HDFC might need to take steps to improve its liquidity management, possibly by securing
additional financing or improving its asset management.

ICICI Bank Current Ratios:

 2023-24 (0): A ratio of 0 means that ICICI has no current assets to cover its short-term
liabilities, which is an extremely risky situation. It suggests that ICICI might face severe
liquidity problems in the short term, as it lacks the resources to pay off its immediate
obligations.

 2022-23 (1.38): This is a healthy ratio, indicating that ICICI has sufficient short-term assets to
cover its short-term liabilities. The bank is in a good position to manage its current
obligations and has a solid liquidity position.

 2021-22 (2.34): A very strong ratio, showing that ICICI had more than enough short-term
assets to cover its short-term liabilities. This suggests ICICI had a robust financial position and
ample liquidity during this period.

 2020-21 (1.59): Another healthy ratio, indicating that ICICI had more than enough short-term
assets to cover its liabilities. It suggests that the bank was in a strong liquidity position in this
year.

 2019-20 (1.58): Similar to 2020-21, ICICI had a solid liquidity position, with the ratio well
above 1. The bank was able to meet its short-term liabilities comfortably.

ICICI’s current ratios are generally healthy, indicating good liquidity management. The significant
decline in 2023-24 to 0 is alarming, suggesting a major liquidity issue. However, the other years show
that ICICI has been in a much stronger financial position, with ratios well above 1. This sharp drop
could indicate an extraordinary event in 2023-24, such as a sudden shift in assets or liabilities, or
perhaps an error in reporting.

Comparison Between HDFC and ICICI:

 Liquidity Concerns for HDFC: HDFC’s ratios show a significant liquidity issue, especially in
2023-24 (0.09), where the bank might struggle to meet short-term obligations. While there is
a slight improvement in the other years, they still indicate an overall risk of liquidity
problems, with all years having ratios below 1.

 ICICI’s Strong Position (Before 2023-24): ICICI has been in a much better liquidity position
until 2023-24, with ratios consistently above 1 (and even above 2 in 2021-22). This indicates
that, generally, ICICI has been able to cover its short-term liabilities comfortably. However,
the drop to 0 in 2023-24 is highly unusual and could signal a financial crisis, a major change
in strategy, or reporting issues.

NET PROFIT MARGIN RATIO

The Net Profit Margin Ratio formula is:

Where:

 Net Profit = Revenue - Total Expenses (including operating expenses, interest, taxes, and
depreciation)

 Revenue = Total sales or income generated by the business

This ratio shows the percentage of revenue that translates into profit, helping to assess the
profitability and efficiency of a company. A higher net profit margin indicates that a company is
effectively converting sales into actual profit.

RATIOS
Year
HDFC ICICI
2019-20 22.86 10.6
2020-21 25.74 20.46
2021-22 28.93 27.02
2022-23 27.29 29.2
2023-24 24.92 28.61
Minimum 22.86 10.6
Maximum 28.93 29.2

NET PROFIT MARGIN RATIO

35

30

25

20

15

10

0
2019-20 2020-21 2021-22 2022-23 2023-24

RATIOS HDFC RATIOS ICICI

The Net Profit Margin Ratio is a financial metric that measures the percentage of profit a company
retains from its revenue after all expenses (including taxes, operating costs, and interest) have been
deducted. It provides insight into how efficiently a company is managing its expenses relative to its
total revenue.

HDFC bank:

 2023-24: 24.92
HDFC's Net Profit Margin has decreased compared to 2022-23 (27.29). However, 24.92% is
still a strong margin, meaning that HDFC continues to retain a significant portion of its
revenue as profit, though it may face slight challenges or increased costs in this year.

 2022-23: 27.29
This was a slight decline from the previous year (28.93 in 2021-22), but still a solid margin,
indicating that HDFC was highly profitable. The slight dip could indicate increased operating
costs, lower revenue growth, or other external pressures.

 2021-22: 28.93 (Maximum)

This is the highest Net Profit Margin in the data, meaning HDFC was very efficient in turning
revenue into profit during this period. Factors like strong revenue growth, cost control, or
favorable market conditions might have contributed to this peak.

 2020-21: 25.74
A drop from 2021-22, but still a relatively strong margin. The pandemic and its economic
impacts might have led to a dip, but HDFC was still able to maintain a solid profit margin.

 2019-20: 22.86 (Minimum)

This is HDFC’s lowest Net Profit Margin, likely due to the early impact of the COVID-19
pandemic, which caused operational disruptions, increased costs, or decreased revenues.
The low margin here suggests that HDFC was less profitable during this time.

Key takeaway for HDFC:

 HDFC’s margin peaked at 28.93% in 2021-22, and while it dropped in 2022-23 and 2023-24,
it remains strong.

 The lowest margin in 2019-20 can be attributed to pandemic-related disruptions, but the
recovery afterward is evident with margins stabilizing above 24%.

ICICI bank:

 2023-24: 28.61
ICICI's Net Profit Margin has decreased slightly from 29.2 in 2022-23, but it’s still a very
strong margin. It indicates that ICICI has remained highly profitable, with a minor dip in 2023-
24 suggesting some cost pressures or slight operational challenges.

 2022-23: 29.2 (Maximum)

This is ICICI’s highest Net Profit Margin, suggesting a highly profitable year. The increase
from the previous years shows significant efficiency in turning revenue into profit, possibly
aided by effective cost management, growth in high-margin business, or favorable market
conditions.
  2021-22: 27.02
A slight drop from the peak in 2022-23, but still a strong margin. ICICI remained profitable in
2021-22, even though it wasn't at its best.

 2020-21: 20.46
A significant decline in the Net Profit Margin, which could be attributed to the challenges
posed by the COVID-19 pandemic, affecting revenues or increasing costs. The lower margin
suggests that ICICI faced significant operational pressure in this period.

 2019-20: 10.6 (Minimum)

The lowest margin for ICICI, reflecting significant challenges. The pandemic likely caused a
major drop in revenue or significant increases in costs, leading to a much lower profit margin
compared to later years.

Key takeaway for ICICI:

 ICICI showed outstanding recovery after the sharp dip in 2019-20. Its Net Profit Margin
peaked at 29.2% in 2022-23, suggesting excellent profitability.

 Despite a small decline in 2023-24, ICICI’s margin remains strong, which indicates that the
company is still performing well, even if not at its peak.

Comparison between HDFC and ICICI:

 ICICI’s performance has been more robust in recent years. After a very low Net Profit Margin
in 2019-20 (10.6%), ICICI rebounded sharply, with its highest margin (29.2%) in 2022-23. It
maintained strong profitability even in 2023-24, with a margin of 28.61%.

 HDFC had a strong peak in 2021-22 with a Net Profit Margin of 28.93%, but it has
experienced a gradual decline since then, with 2023-24 showing a margin of 24.92%.

 ICICI has managed to consistently achieve higher margins compared to HDFC since 2021-22,
and the gap between the two companies has widened in recent years, particularly in 2022-
23 when ICICI reached its peak margin.

 HDFC’s performance, while still strong, appears to be showing some signs of decline since its
peak in 2021-22, while ICICI has been steadily improving, surpassing HDFC in 2022-23 and
continuing strong performance in 2023-24.
 RETURN ON EQUITY
Return on Equity (ROE) is a financial ratio that measures a company’s ability to generate profit from
its shareholders' equity. It shows how efficiently a company uses its equity investments to generate
profit.

Formula for Return on Equity (ROE):

Where:

 Net Income (PAT) is the profit after all expenses, taxes, and interest have been deducted.

 Shareholders' Equity represents the total equity capital invested by shareholders, including
retained earnings and paid-in capital.

Interpretation:

 Higher ROE: Indicates that the company is effectively using its equity capital to generate
profits, which is generally a positive sign for investors.

 Lower ROE: Suggests that the company is not effectively utilizing its equity base to generate
profits, which could be a sign of inefficiency.

Importance of ROE:

 Profitability: ROE is an indicator of how well the company is generating profit from its equity
capital.

 Investor Perspective: A high ROE can make a company attractive to investors, as it suggests
good return potential on their investments.

 Comparative Tool: ROE is often used to compare the profitability of companies within the
same industry.

A high and consistent ROE is typically considered a positive sign, reflecting strong management and
effective use of equity capital.
 RATIOS
Year
HDFC ICICI
2019-20 16.8 7.07
2020-21 16.6 12.21
2021-22 16.9 14.77
2022-23 17.4 17.28
2023-24 16.1 18.71
Minimum 17.4 7.07
Maximum 16.1 18.71

RETURN ON EQUITY

20
18
16
14
12
10
8
6
4
2
0
2019-20 2020-21 2021-22 2022-23 2023-24

RATIOS HDFC RATIOS ICICI

The Return on Equity (ROE) is a key financial ratio that measures a company's ability to generate
profits from its shareholders' equity. A higher ROE indicates more efficient use of equity capital to
generate profits. It shows how well the company is utilizing its equity to grow its business and deliver
returns to shareholders.

HDFC BANK:

 2023-24: 16.1
HDFC's ROE has declined from 17.4 in 2022-23, indicating a reduction in its ability to
generate returns from equity capital. However, a ROE of 16.1 is still considered solid and
suggests that HDFC remains relatively efficient at generating profit from shareholder equity,
even though there is a slight dip.
  2022-23: 17.4
This is HDFC’s highest ROE in the data, signaling an efficient year for generating returns on
equity. It suggests that HDFC was particularly effective at using its equity to produce profits
in this period, likely benefiting from favorable conditions or a good balance of risk and
reward.

 2021-22: 16.9
Slightly lower than 2022-23 but still a solid ROE. This shows that HDFC continued to generate
healthy returns on its equity, with no significant deterioration in its financial performance
compared to the previous year.

 2020-21: 16.6
A small dip from the previous year, but still a relatively stable ROE. Despite the impact of the
COVID-19 pandemic on many companies, HDFC maintained a strong performance with
minimal decline in profitability, which is reflected in the consistency of its ROE.

 2019-20: 16.8
The ROE is very similar to 2020-21, indicating a stable return on equity. This slight variation
could reflect how well HDFC managed the early pandemic challenges while still producing
solid returns for its shareholders.

Key takeaway for HDFC:

HDFC has shown consistent ROE over the five years, with its highest ROE in 2022-23 (17.4). The slight
drop in 2023-24 to 16.1 is worth noting, but the ROE remains relatively strong and above 16%,
indicating that HDFC is still efficiently utilizing its equity to generate returns.

ICICI BANK :

 2023-24: 18.71
ICICI's ROE has reached its highest level in the data. This suggests that ICICI was highly
efficient in using its equity to generate profits in 2023-24. The increase from previous years
shows that ICICI has likely made significant improvements in profitability, cost control, or
capital efficiency.

 2022-23: 17.28
This is a solid ROE, reflecting good profitability and efficient use of shareholder equity. While
slightly lower than 2023-24, it is still quite strong, indicating a consistent ability to generate
returns.

 2021-22: 14.77
A decrease from 2022-23, but still a healthy ROE. This shows that ICICI maintained positive
returns on equity, though it may have faced some challenges in achieving higher levels of
profitability in this period.

 2020-21: 12.21
A significant increase compared to 2019-20. This shows that ICICI had improved its ROE
significantly, possibly due to operational improvements, cost-cutting measures, or recovering
from the challenges faced in 2019-20.

 2019-20: 7.07
This is the lowest ROE for ICICI, reflecting a difficult period. The early stages of the COVID-19
 pandemic had a major impact on ICICI's profitability, and it struggled to generate returns on
equity during this year.

Key takeaway for ICICI:

 ICICI had a dramatic improvement in ROE over the five years, with its lowest point in 2019-
20 at 7.07. However, by 2023-24, ICICI reached an outstanding ROE of 18.71, the highest in
the data, reflecting a strong recovery and an efficient use of equity in recent years.

Comparison between HDFC and ICICI:

 HDFC has shown a consistent and steady ROE, with only a small fluctuation over the five-
year period, staying close to the 16-17% range. HDFC's highest ROE came in 2022-23 (17.4),
while the lowest was in 2020-21 (16.6), showing stability in performance.

 ICICI, on the other hand, experienced a sharp recovery in ROE, increasing from a low of
7.07% in 2019-20 to 18.71% in 2023-24, which indicates substantial improvements in
efficiency and profitability over the period.

 ICICI’s ROE growth is more pronounced, while HDFC has maintained stable but slightly lower
performance. ICICI’s significant improvement in recent years suggests better capital
utilization and a more efficient generation of profits from equity.
 RETURN ON ASSET
The Return on Assets (ROA) is a financial ratio that indicates how profitable a company is relative to
its total assets. It shows how effectively a company is using its assets to generate earnings.

Where:

 Net Income (PAT) is the profit after all expenses, taxes, and interest have been deducted.

 Total Assets is the total value of all assets owned by the company.

RATIOS
Year
HDFC ICICI
2019-20 2.01 0.81
2020-21 1.97 1.42
2021-22 2.03 1.84
2022-23 2.07 2.16
2023-24 1.98 2.37
Minimum 1.97 0.81
Maximum 2.07 2.37
 RETURN ON ASSET
2.5

1.5

0.5

0
2019-20 2020-21 2021-22 2022-23 2023-24

RATIOS HDFC RATIOS ICICI

The Return on Assets (ROA) is a financial ratio that indicates how efficiently a company uses its
assets to generate profit. It is calculated by dividing net income by total assets. A higher ROA
suggests that the company is using its assets more efficiently to produce earnings. In general, a
higher ROA is a sign of good asset utilization.

HDFC BANK :

 2023-24: 1.98
HDFC’s ROA has decreased slightly from 2.07 in 2022-23, but it remains stable. A ROA of 1.98
still indicates that HDFC is generating solid returns from its assets. Though there’s a minor
dip, the company is still managing its assets well in 2023-24.

 2022-23: 2.07 (Maximum)

This is the highest ROA for HDFC over the period, meaning that in 2022-23, HDFC was most
efficient at generating profit from its assets. This could indicate effective management,
strong profitability, or optimal use of its asset base.

 2021-22: 2.03
A slight drop from the peak in 2022-23, but still a solid ROA. This shows HDFC maintained
efficient asset utilization during 2021-22, with a relatively small change compared to 2022-
23.

 2020-21: 1.97
This represents a slight decline compared to 2021-22, but it’s still a relatively high figure,
indicating that HDFC’s asset utilization remained quite good even in the challenging year
following the pandemic.

 2019-20: 2.01 (Minimum)

The lowest ROA in this period, but at 2.01, this is still a strong performance. Despite the
difficulties faced during the early stages of the COVID-19 pandemic, HDFC still managed to
generate solid returns from its assets.

Key takeaway for HDFC:

HDFC’s ROA has been consistently strong, with the highest in 2022-23 (2.07) and lowest in 2019-20
(2.01). The overall trend is relatively stable, indicating that HDFC has maintained efficient asset
utilization, even though there’s been some minor fluctuation.

ICICI BANK :

 2023-24: 2.37
ICICI’s ROA has increased from 2.16 in 2022-23, showing a positive trend in asset efficiency.
A ROA of 2.37 means that ICICI is effectively using its assets to generate higher profits,
marking an improvement in asset utilization in the most recent year.

 2022-23: 2.16
This is a solid ROA for ICICI, reflecting strong asset utilization. While not as high as in 2023-
24, the increase from previous years shows consistent improvement in how ICICI manages its
assets.

 2021-22: 1.84
A noticeable increase from 2020-21, showing that ICICI was utilizing its assets more
efficiently. The company was able to generate more returns from its asset base compared to
the previous year, which could reflect operational improvements, better profitability, or
growth in asset efficiency.

 2020-21: 1.42
A moderate ROA, but still a decent result. This represents a significant recovery compared to
2019-20, indicating that ICICI managed to generate more returns from its assets, even in the
wake of the pandemic.

 2019-20: 0.81 (Minimum)

ICICI’s lowest ROA by far. The sharp dip in 2019-20 suggests that ICICI faced significant
challenges in generating returns from its assets, likely due to the negative impact of the
COVID-19 pandemic on its operations and profitability.

Key takeaway for ICICI:

 ICICI’s ROA showed a strong recovery, starting from a low of 0.81 in 2019-20, then
improving significantly in subsequent years. By 2023-24, ICICI reached its highest ROA at
2.37, indicating much better asset utilization and profitability in the most recent year.

Comparison between HDFC and ICICI:

 HDFC has shown a relatively stable and consistent ROA throughout the period, with a minor
increase over the years, peaking in 2022-23 at 2.07. The latest value in 2023-24 (1.98) shows
a slight dip, but it remains strong.

 ICICI experienced a sharp improvement in ROA since the low point in 2019-20 (0.81). The
company has gradually increased its ROA over the years, reaching its peak at 2.37 in 2023-
24. This shows that ICICI has significantly improved the efficiency with which it uses its
assets, especially after a very challenging period.

 ICICI has outperformed HDFC in recent years in terms of ROA, with a consistent upward
trend, while HDFC’s ROA has been relatively steady but with less growth compared to ICICI.
NET NPA TO NET ADVANCE RATIO

RATIOS
Year
HDFC ICICI
2019-20 0 2
2020-21 0 2
2021-22 0 1
2022-23 0.27 0.51
2023-24 0.33 0.45
Minimum 0.27 0.45
Maximum 0.33 2
 NET NPA TO NET ADVANCE RATIO
2.5

1.5

0.5

0
2019-20 2020-21 2021-22 2022-23 2023-24

RATIOS HDFC RATIOS ICICI

The Net NPA (Non-Performing Assets) to Net Advances Ratio measures the proportion of a bank's
loans (advances) that are non-performing (i.e., loans that are either in default or close to default). A
lower ratio is better, as it indicates a lower level of non-performing loans relative to the bank's total
advances, signifying better asset quality and a lower risk of loan defaults. A higher ratio suggests
more non-performing loans, indicating potential credit risk issues and weaker asset quality.

HDFC Interpretation:

 2023-24: 0.33
HDFC's Net NPA to Net Advances Ratio has increased slightly compared to 2022-23 (0.27),
but it remains relatively low. This suggests that HDFC has maintained a low level of non-
performing loans relative to its total advances, which is a positive indicator of asset quality
and a healthy loan book.

 2022-23: 0.27
This is a very low ratio for HDFC, indicating that the proportion of non-performing assets
relative to its advances was minimal. This is a sign of good asset quality, meaning the bank
had very few defaulted loans or loans under stress during this period.

 2021-22: 0
HDFC had no Net NPA at all, which is an excellent indicator of asset quality. A 0% ratio means
that none of HDFC's loans were classified as non-performing, suggesting highly effective
credit risk management and an excellent loan portfolio in that year.

 2020-21: 0
Similar to 2021-22, HDFC had no Net NPA in 2020-21. This shows that, despite the challenges
posed by the COVID-19 pandemic, HDFC was able to maintain a very strong asset quality and
had no problematic loans.

 2019-20: 0
Again, no Net NPA for HDFC in 2019-20, reflecting perfect asset quality at that time as well.

Key takeaway for HDFC:

HDFC has consistently had very low or no non-performing assets over the period. The ratio
increased slightly to 0.33 in 2023-24, but it remains quite healthy. HDFC's track record shows strong
credit risk management and an efficient loan portfolio.

ICICI BANK :

 2023-24: 0.45
ICICI’s Net NPA to Net Advances Ratio has decreased slightly from 0.51 in 2022-23, indicating
that the proportion of non-performing loans has improved, but it is still higher than HDFC's
ratio. A 0.45 ratio still reflects moderate asset quality, with some level of defaulted loans
relative to the total advances, but the trend is moving in a positive direction.

 2022-23: 0.51
This is a moderate ratio compared to the other years. It indicates that ICICI was dealing with
a relatively higher level of non-performing loans compared to HDFC. This suggests that ICICI
may have faced more challenges in managing credit risk during this period, though the ratio
is still not excessively high.

 2021-22: 1
A 1% ratio indicates that a larger portion of ICICI's advances were non-performing during this
period. This shows a more significant credit risk, meaning that ICICI had a higher level of
defaulted loans relative to its total loan book, which could be a sign of increased challenges
in its lending operations.

 2020-21: 2
ICICI’s Net NPA to Net Advances Ratio was 2%, reflecting a higher proportion of non-
performing loans. This indicates that, during 2020-21, ICICI faced greater challenges with
loan defaults, potentially due to the economic disruptions caused by the COVID-19
pandemic.

 2019-20: 2
This was also a high ratio for ICICI, indicating that a significant portion of its loans were non-
performing during this period. Like in 2020-21, ICICI's loan book likely faced significant credit
risk, which is common during periods of economic stress.

Key takeaway for ICICI:

ICICI experienced higher levels of non-performing assets compared to HDFC, especially in the 2020-
21 and 2019-20 periods. However, the Net NPA ratio has been gradually improving, dropping from
2% in 2019-20 and 2020-21 to 0.45% in 2023-24, which indicates that ICICI has made progress in
reducing its non-performing loans and improving asset quality.

Comparison between HDFC and ICICI:

 HDFC has consistently maintained a low or zero ratio, showing excellent asset quality over
the five years. HDFC’s credit risk management appears to be very strong, with minimal or no
defaults in its loan book during the period.

 ICICI, on the other hand, has experienced a higher ratio of non-performing assets, especially
in the earlier years (2019-20 and 2020-21), when the ratio was as high as 2%. However, there
has been significant improvement, with the ratio falling to 0.45% in 2023-24. This suggests
 that ICICI has been working to improve its asset quality, although it still faces some credit
risk.

 HDFC's performance is superior when it comes to managing non-performing loans, with a

consistent track record of very low or no NPAs. ICICI's performance, though improving, has
shown more fluctuation, with higher levels of non-performing loans in earlier years.

CONCLUSION
1. Profitability: ICICI has outperformed HDFC in terms of net profit margin and return on equity
(ROE), particularly showing significant improvement since 2019-20. Despite some decline in
2023-24, ICICI's profitability remains robust, especially with a peak in 2022-23. HDFC, while
still profitable, has seen a decline in net profit margins over the past two years, indicating
potential challenges in maintaining profitability.

2. Liquidity: Both banks have faced liquidity issues in 2023-24. HDFC’s liquidity situation is
particularly concerning, with a sharp drop to 0.09, suggesting a potential cash flow or
operational issue. ICICI also saw a drop to 0 in liquidity in 2023-24, which could signal a
major financial issue or an error in reporting, warranting further scrutiny.

3. Asset Quality: HDFC has demonstrated exceptional asset quality, with a very low NPA ratio,
maintaining zero NPAs for two consecutive years. ICICI, on the other hand, while starting
with higher NPAs, has made notable progress in reducing its NPA ratio to 0.45% by 2023-24,
showing improved credit risk management over time. Despite this, HDFC still excels in asset
quality.

4. Return on Assets (ROA): ICICI’s ROA has seen a remarkable improvement, reflecting better
asset management efficiency, whereas HDFC has maintained a stable but less dynamic ROA.
ICICI’s ability to generate profit from assets has been more efficient in recent years, while
HDFC’s stable performance suggests consistent but unremarkable asset utilization.

Conclusion:

Overall, ICICI has demonstrated a stronger recovery and improvement in profitability and asset
management over the past few years, particularly in 2023-24, while HDFC maintains solid
performance, especially in asset quality. However, HDFC faces more significant challenges with
liquidity, and its profitability has declined in recent years. Both banks have strong financial
foundations, but ICICI seems better positioned in terms of growth and overall profitability, while
HDFC's strength lies in its asset quality management.