MUMBAI: HDFC Bank’s deposit base surpassed its advances for the primary time after the merger of its dad or mum housing finance firm with the financial institution in July 2023. The nation’s largest non-public financial institution disclosed its enterprise figures for Q3 FY25 in a submitting with the inventory exchanges.
The financial institution’s advances progress has slowed as a part of its technique, although that is anticipated to strain margins since fewer incremental deposits are being deployed as loans. Additionally, most deposit progress in the course of the quarter got here from time period deposits whereas the decline in advances was due to a ten% drop within the financial institution’s company mortgage ebook.
HDFC Bank’s deposits stood at Rs 25.6 lakh crore as of Dec 31, 2024, marking a progress of 15.8% from Rs 22.1 lakh crore on Dec 31, 2023, and a pair of.5% from Rs 25 lakh crore on Sept 30, 2024. Gross advances had been Rs 25.4 lakh crore, reflecting a 3% enhance from Rs 24.7 lakh crore on Dec 31, 2023.
At the business degree, financial institution credit score and deposits have grown at round 11.5% year-on-year till mid-Dec. While HDFC Bank’s deposit progress is outpacing the system, its advances are rising slower.
The slower advances progress aligns with the financial institution’s technique, as outlined by MD & CEO Sashidhar Jagdishan within the Q2 FY25 earnings name. “We will bring down the credit-deposit ratio faster than what we had anticipated in the past. FY25, we would probably grow slower than the system. FY26, we may be at or around the system growth rate. FY27, we should be faster than the system growth rate,” he mentioned.
Although the financial institution has seen strong deposit progress, the extra funds have come at a price. Its time period deposits rose to Rs 16.9 lakh crore as of Dec 31, 2024, up 22.7% from Rs 13.8 lakh crore on Dec 31, 2023, and 4.6% from Rs 16.2 lakh crore on Sept 30, 2024.
“As we have witnessed in previous high interest rate cycles, customer preferences continue to be towards time deposits, probably to lock in at higher rates,” Jagdishan mentioned after the Q2 FY25 outcomes.
The financial institution’s period-end advances beneath administration stood at Rs 26.8 lakh crore as of Dec 31, 2024, reflecting a progress of 6.1% from Rs 25.3 lakh crore on Dec 31, 2023, and 1.9% from Rs 26.3 lakh crore on Sept 30, 2024. On a year-on-year foundation, retail loans grew by 10%, whereas business and rural banking loans elevated by 11.5%. However, company and different wholesale loans declined by 10.3% in comparison with Dec 31, 2023.
