Mumbai: Two Indian banks, HDFC Bank and State Bank of India (SBI), now figure in a list of the top 50 global banks in terms of market capitalization. HDFC Bank, India’s second-largest private lender in terms of asset size, ranks 45th, with a market capitalization of $39 billion, Bloomberg data show. With a market capitalization of $38 billion, SBI is ranked 46th, reports Business Standard.
ICICI Bank, ranked 53rd, is the only other Indian entity to figure in the list of the 100 most valued global banks. The market capitalization, or value, of an entity is calculated by multiplying the total number of its shares outstanding by its stock price.
The huge leap in the rankings of Indian lenders is due to a sharp rally in their stocks in the past year. During this period, shares of HDFC Bank gained 50 per cent, while those of SBI nearly doubled. ICICI Bank added about 70 per cent.
A year ago, no Indian bank featured among the 60 most valued global banks. At 65, HDFC Bank had the best ranking among Indian lenders.
The BSE Bankex, a barometer of the performance of banking stocks, has been one of the best-performing sectoral indices in the past year. It gained 75 per cent, against a 33 per cent rise in the benchmark Sensex. The rise in bank stocks was in anticipation of a revival in domestic economic growth, led by a reform push by the new government.
“Expectation that the domestic economy will revive has contributed to gains in the Indian stock market. Monetary policy action and hopes of government reforms have led to an improvement in investor sentiment,” said Vaibhav Agrawal, vice-president (research), Angel Broking.