In recent months of 2022, the bank interest rates have increased. This increase in the interest rates will have a positive impact on the Indian banking sector and banking stock. Their profits will increase as more interest will be collected on short, medium, and long-term loans and lending. The profit margin will also improve because the cost of the bank (deposit interest) will remain constant. The deposit rates remain constant so that banks can have enormous amounts of profits while the interest rates are high. Because of high-profit margins, high CASA percentage, and other similar factors, the banking stocks also perform well in the banking stock markets. So let us discuss the best banking stocks to buy in 2022.
Best banking stocks in India to buy in 2022:
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HDFC Bank: This bank has become an industry leader in the Indian banking and wealth management sector. With 0.30-0.40%, the bank has maintained the best NPA in the sector. HDFC bank has an optimum CAGR of 15% in 5 years. While the interest rate was rising, the CASA was 47%. To improve the portfolio performance of the bank, they adopted some wise approaches, which in turn will help them grow and perform well in the stock market.
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ICICI Bank: When interest rates were increasing, the CASA of ICICI bank was as high as 46%. ICICI bank has a considerable market share in the banking industry because of its products. With a strong CASA and a low NPA ratio of 0.85%, this bank is a good option to invest in 2022.
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AXIS Bank: As of December 2021, Axis bank is the third largest private sector bank. With an NPA ratio as low as 0.91% and a CASA deposit of 44% during the rise of interest rates, investing in this stock will be a good choice in 2022.
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Kotak Mahindra Bank: Kotak Mahindra Bank adopted a sensible approach to emerging as a player in the banking and financial sector. They have a CASA deposit of 61% and recorded a CAGR of 5.27% in 5 years. It makes perfect sense to invest in such banks in the stock market.
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IndusInd Bank: IndusInd bank has a wide array of domain knowledge. They are mostly into rural banking. With a CASA deposit of 42% and a low NPA of 0.71%, it is one of the best private sector banks. The IndusInd bank has handled itself after the Yes bank saga.
Although increasing interest rates is a good signal for the banking sector as profit margins grow. But, a downside of this is the poor portfolio performance of the bank. And the banking stocks mentioned above are stocks that have a very cautious approach towards all these and that is why all the banks are estimated to perform well.