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5 Best Banking Stocks to Invest in 2024

07 Mar 2024


The Indian financial sector is evolving. As technology advances, banks will find it easier to spread their services to even the most isolated rural areas. As the customer base of these institutions grows, so will their revenue. In this instance, stockholders will benefit from the company's growth. So, if you have yet to include banking stocks in your portfolio, here are some alternatives.

Five Best Banking Stocks in 2024

1. HDFC Bank

HDFC Bank was set up in 1994 as a Housing Development Finance Corporation (HDFC) subsidiary. It has a network of over 8143 branches and 18,089 Automated Teller Machines (ATMs) across India. Over the years, HDFC has expanded its reach to Bahrain, Hong Kong and Dubai. 

The strength of this bank lies in its 120 million customers and innovative banking products like PayZapp, MobileBanking, SME Digital and Cardless Cash. HDFC is noted for its high-worth customers and its reach in rural areas.

But why is this stock worth investing in? Check out the pointers.

  • Since its inception, it has delivered a whopping 6492.11% return. 
  • Its dividend yield of 0.98% has outperformed the industry average.
  • Its net income in the last five years has grown at an annual rate of 19.97%.

2. State Bank of India (SBI)

With over 22,000 branches, 65,000+ ATMs, 66,000 business correspondents and more than 200 years of experience, SBI is on this list. SBI also has a global presence in 29 foreign countries, serving more than 48 crores customers worldwide.

SBI Bank leads digital banking with innovative products and platforms such as YONO, SBIePay, SBI FasTag, SBI Wealth, and SBI InCube. It also provides various social initiatives and schemes for the welfare of society, such as SBI Green Rupee Term Deposit, SBI WECARE, SBI Startup, and SBI Tech Learning Centres.

But why is this stock worth investing in? Check out the pointers.

3. ICICI Bank

ICICI Bank is noted for its personal, business, and Non-Resident Indians (NRI) banking. The bank has a chain of over 6,000 branches and over 17,000 ATMs across India. It has a global presence in 17 countries. 

Some notable customer-centric digital banking solutions include Unified Payments Interface (UPI), WhatsApp Banking, iWish, Pockets, PayLater, and more.

But why is this stock worth investing in? Check out the pointers.

4. Kotak Mahindra Bank 

Kotak Mahindra Bank is another of India's leading private sector banks, with a network of over 1,600 branches and 2,600 ATMs nationwide.

The bank was established in 1985 as Kotak Mahindra Finance Limited, a non-banking financial company. In 2003, it became the first Indian company to convert into a bank. Since then, it has grown rapidly through organic and inorganic expansion, acquiring several businesses such as ING Vysya Bank, BSS Microfinance, and Ford Credit India.

But why is this stock worth investing in? Check out the pointers.

  • Kotak Mahindra's PB and PE ratios are 3.05 and 22.96, respectively.
  • At 16.9%, its current ratio is better than the industry average.
  • Kotak Mahindra Bank is free from any red flags.

5. Bandhan Bank 

Bandhan Bank has a network of over 6,000 banking outlets and 438 ATMs across 35 states and union territories. Over 3.26 crore customers trust this bank's service.


Bandhan Bank also firmly commits to social responsibility, with its Corporate Social Responsibility (CSR )programmes reaching out to more than 19 lakh participants in 13 states, focusing on education, health, livelihood, and women empowerment. 

Bandhan Bank started 2001 as a microfinance institution and became a full-fledged bank in 2015. 

But why is this stock worth investing in? Check out the pointers.

  • Bandhan Bank's PB and PE ratios are 1.71 and 15.29, respectively.
  • It has a dividend yield of 0.72, slightly behind the industry average.
  • Bandhan Bank stocks are not in an overbought zone and are not overpriced.

Conclusion ​​​​​​​

Banking stocks are constantly in demand and have a high trading volume. However, before selecting any of the above stocks, carefully analyse the financials and conduct a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis. Before making any decisions, carefully consider the stock's strengths and weaknesses.


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