)
A recent report by Macquarie Research indicated that HDFC Bank’s LDR, from a peak of approximately 110 per cent, has declined to 103.5 per cent | (Photo: Shutterstock)
HDFC Bank, the country’s largest private sector lender, said on Friday that its deposit growth for the quarter ending September 2024 (Q2FY25) has outpaced its credit growth on a sequential basis. In Q2FY25, the bank reported a 5.1 per cent growth in deposits compared to Q1FY25, while its advances during the same period rose by 1.3 per cent, according to an exchange filing.
On a year-on-year basis, HDFC Bank’s deposit growth has also outpaced its credit growth in Q2FY25. At the end of the quarter, its deposit base stood at Rs 25 trillion, up 15.1 per cent year-on-year from the corresponding period a year ago, while its gross advances stood at Rs 25.19 trillion, up 7 per cent year-on-year.
HDFC Bank had earlier indicated that it would grow its advances at a slower pace than its deposits as it seeks to bring down its elevated loan-to-deposit ratio (LDR) to pre-merger levels. The erstwhile mortgage financier HDFC was merged with the bank effective July 1, 2023. During the post-earnings analyst call for Q1, the bank’s managing director and chief executive officer Sashidhar Jagdishan stated that the bank is aiming to reduce its LDR “as quickly as possible” while maintaining its commitment to profitable growth.
In Q2FY25, the bank also securitised Rs 19,200 crore of loans as a strategic initiative to lower its high LDR.
A recent report by Macquarie Research indicated that HDFC Bank’s LDR, from a peak of approximately 110 per cent, has declined to 103.5 per cent, aligning with the bank’s stated strategy of consolidating the balance sheet and focusing on margins and profitability in the medium term.
According to Friday’s exchange filing, HDFC Bank’s current account savings account (CASA) deposits stood at Rs 8.83 trillion in Q2FY25, up around 8 per cent compared to Q2FY24, and around 2.3 per cent compared to Q1FY25. Its time deposits stood at Rs 16.16 trillion in Q2FY25, 19.3 per cent higher than the same period last year, and 6.7 per cent higher than the previous quarter, reflecting customer preference for time deposits during this stage of the rate cycle.
Additionally, the bank notified that its advances under management stood at Rs 26.33 trillion in Q2FY25, up 8 per cent year-on-year, and 2.3 per cent sequentially. It also highlighted that during the quarter, its retail loans grew by around Rs 33,800 crore; commercial and rural banking loans grew by around Rs 38,000 crore; and corporate and other wholesale loans were lower by Rs 13,300 crore compared to Q1FY25.
HDFC Bank’s shares were trading 0.15 per cent higher at Rs 1,684.60.
First Published: Oct 04 2024 | 11:58 AM IST
