Archive · 28 Sep 2026
BofA Maps Four Distinct Growth Paths for India’s Large Banks
BofA Securities studied four large Indian banks and said all four could perform well.
It gave each bank a Buy rating.
State Bank of India may benefit because it has strong funding and a large balance sheet.
ICICI Bank is expected to grow faster than the overall banking industry.
HDFC Bank is showing better loan growth and deposits, but its chief executive transition remains important.
Kotak Mahindra Bank could improve as loan demand and unsecured retail lending recover.
Overall, Indian bank lending has grown by about 20% compared with last year.
More available money in the financial system and festive-season demand could support further lending, although margins may face short-term pressure.
BofA Securities retained Buy ratings on State Bank of India, ICICI Bank, HDFC Bank and Kotak Mahindra Bank.
The brokerage said Indian bank credit growth reached about 20% year-on-year by the end of August.
State Bank of India is backed by funding strength, low domestic loan-to-deposit levels and corporate and small-business demand.
ICICI Bank is expected to outgrow the industry by 2-3%, while HDFC Bank’s loan and deposit trends are improving.
Kotak Mahindra Bank is expected to benefit from stronger credit growth, unsecured-retail recovery and improving returns.
- Who
- BofA Securities and the four banks it analyzed: State Bank of India, ICICI Bank, HDFC Bank and Kotak Mahindra Bank.
- What
- BofA outlined four different growth strategies and retained Buy ratings on all four banks.
- When
- The assessment refers to conditions through the end of August and forecasts for FY26-FY28.
- Where
- India’s banking sector.
- Why
- Improving system liquidity and stronger credit demand are supporting the banking recovery, while each bank has different growth drivers.
- Credit growth
- Indian bank credit growth reached around 20% year-on-year by the end of August.
- State Bank of India target
- BofA retained a Buy rating and a Rs 1,250 price objective, implying 26% upside.
- ICICI Bank target
- BofA raised its price objective to Rs 1,650 from Rs 1,600 and retained Buy, implying 23% upside.
- HDFC Bank target
- BofA retained Buy and an Rs 880 price objective, implying 21% upside.
- Kotak Mahindra Bank target
- BofA raised its price objective to Rs 500 from Rs 460 and retained Buy, implying 20% upside.
- Kotak loan growth
- BofA expects Kotak Mahindra Bank’s loan book to grow 15-16% annually over FY26-FY28.
- Margin pressure
- Elevated FCNR deposit mobilisation in the second quarter could weigh on reported net interest margins.