SBI and other banking stocks with high CASA and Low NPA to add to your watchlist

In India’s financial landscape, a bank’s Current Account Savings Account (CASA) ratio and Non-Performing Assets (NPA) serve as key indicators of its financial strength. The CASA ratio reflects the proportion of a bank’s deposits held in current and savings accounts, typically lower-cost sources of funds allowing banks to maintain strong net interest margins (NIM). 

A higher CASA ratio generally leads to lower funding costs, enhancing profitability. On the other hand, a low NPA ratio indicates effective credit assessment and risk management, signaling a bank’s ability to maintain asset quality.

Here are three banks that stand out based on their CASA ratio and NPA levels:

1. Kotak Mahindra Bank Ltd

With a market capitalization of Rs.3.92 lakh crore, the shares of Kotak Mahindra Bank Ltd closed at Rs.1,949.80 per share on Friday, showcasing a 1.17 percent fall from its previous close.

As of December 2024, Kotak Mahindra Bank reported a CASA ratio of 42.3 percent, driven by a 5 percent quarter-on-quarter growth in current account deposits. The bank’s average total deposits for the quarter increased by 15 percent year-on-year, while its average sweep term deposit product grew at a robust 36 percent annually.

Additionally, the bank maintained a strong credit-deposit (CD) ratio of 87.4 percent. Net Interest Margin (NIM) for the quarter remained stable, with a slight uptick to 4.93 percent.

As of December 2024, Kotak Mahindra Bank reported a Gross NPA of 1.5 percent and a Net NPA of 0.41 percent, reflecting stable asset quality. The bank’s provision coverage ratio improved to 73 percent, further strengthening its financial resilience. Overall, the bank’s credit quality remained stable and aligned with expectations over the past quarter.

2. ICICI Bank Ltd

With a market capitalization of Rs.8.9 lakh crore, the shares of ICICI Bank Ltd closed at Rs.1,259.00 per share on Friday, showcasing a 0.81 percent increase from its previous close.

As of December 2024, ICICI Bank Ltd’s CASA deposits stood at Rs.6,155.86 crore, reflecting a year-on-year growth of 16.6 percent, with a CASA ratio of 40.5 percent. The current account segment contributed Rs.1,904.38 crore, marking a 24.1 percent increase year-on-year and accounting for 12.5 percent of total deposits.

Meanwhile, savings deposits reached Rs.4,251.48 crore, registering a 13.5 percent year-on-year growth and comprising 28.0 percent of total deposits. The bank’s overall deposit base expanded to Rs.15,203.09 crore, reflecting a 14.1 percent year-on-year increase.

As of December 31, 2024, Kotak Mahindra Bank’s Net NPA ratio remained stable at 0.42 percent, unchanged from the previous quarter. During Q3 FY25, the bank recorded net additions of Rs.26.93 billion to its gross NPAs, compared to Rs.26.24 billion in Q1 FY25 and Rs.17.54 billion in Q2 FY25. 

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3. State Bank of India

With a market capitalization of Rs.6.44 lakh crore, the shares of State Bank of India closed at Rs.720.80 per share on Friday, showcasing a 1 percent fall from its previous close.

As of December 2024, State Bank of India (SBI) reported a 14.22 percent year-on-year growth in Current Account Deposits, reaching Rs.2,85,013 crore. Savings Bank Deposits rose by 2.97 percent to Rs.16,80,224 crore, contributing to total CASA Deposits of Rs.19,65,237 crore, reflecting a 4.46 percent increase and an overall CASA ratio of 39.2 percent.

Meanwhile, Term Deposits grew by 13.47 percent to Rs.30,48,623 crore, driving Domestic Deposits to Rs.50,13,860 crore, marking a 9.76 percent year-on-year rise.

As of December 2024, State Bank of India reported a Gross Non-Performing Asset (NPA) ratio of 2.07 percent, with Gross NPAs declining to Rs.84,360 crore from Rs.86,749 crore in December 2023. The Net NPA ratio stood at 0.53 percent, with Net NPAs reducing to Rs.21,378 crore from Rs.22,408 crore in the same period, reflecting improved asset quality.

Written by – Siddesh S Raskar 

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