How to analyse banks

Summary: Ever wondered why bank stocks feel like a maze of numbers? This piece breaks down the must-know metrics that cut through the confusion. Perfect for spotting solid picks in India's booming banking scene. In India, banks occupy a substantial portion of the overall stock market capitalisation, making them a key component in most equity portfolios, whether through mutual funds or direct investments. With credit penetration still low at around 60 per cent, financial firms enjoy a long growth runway ahead, boosting the appeal of banking stocks.​ However, analysing banks differs markedly from evaluating an FMCG or auto company for many reasons. The financial statements of banks can prove a black hole. Lots of numbers lead to more confusion than clarity. Unlike non-financial firms, whe