MUMBAI: Persistently robust growth in deposits ahead of credit disbursements, analysts believe, will likely help HDFC Bank match the pace of business expansion for the broader banking industry this fiscal after the merger with HDFC left the country's most valued lender a relative straggler for a couple of years.
Provisional business data released by HDFC Bank on Friday showed that gross advances at the end of the first quarter ended June increased 7% to Rs 26.53 lakh crore, from Rs 24.86 lakh crore a year earlier.
Loan growth is still slower than the system-level growth of above 9%. But the bank's year-on-year deposit growth at 16% outpaced its credit growth for the third successive quarter, indicating a return to normalcy.
Total deposits at the end of June stood at Rs 27.64 lakh crore up 16% over the Rs 23.79 lakh crore a year ago and at more than double the rate of credit growth.
This is a change from the fiscal year ended March 2024, post the acquisition of its parent in July 2023, when advances grew at 54% outstripped deposits growth of 26%, exposing the bank to an asset-liability mismatch.
Analysts say those concerns have now abated. Rohan Mandora, analyst at Equirus Securities, said while the bank is still some distance away from the historical growth rates of 1.5 times the broader banking industry, one can expect it to match system-level growth starting this fiscal year and have a better hold on its margins.
"HDFC Bank has been aggressive in cutting term deposit rates in the first quarter and has brought it in line with large private peers. Additionally, quarterly average CASA (current and savings accounts) growth has been much better in the first quarter. We thus believe that improvement in the incremental cost of funds for HDFC would be better than peers. They additionally have levers on loan mix/ liability mix change. We expect HDFC to have lower NIM (net interest margin) compression than larger private banks," Mandora said in a note.
HDFC Bank's average CASA deposits were Rs 8.60 lakh crore at the end of June 2025, up 6% over Rs 8.10 lakh crore a year ago.
Total CASA deposits increased 9% to Rs 9.37 lakh crore as of June 2025, but were lower by around 1% compared to the Rs 9.44 lakh crore reported at the end of March 2025. Total term deposits at Rs 18.27 lakh crore at the end of June 2025 were up 21%.
Provisional business data released by HDFC Bank on Friday showed that gross advances at the end of the first quarter ended June increased 7% to Rs 26.53 lakh crore, from Rs 24.86 lakh crore a year earlier.
Loan growth is still slower than the system-level growth of above 9%. But the bank's year-on-year deposit growth at 16% outpaced its credit growth for the third successive quarter, indicating a return to normalcy.
Total deposits at the end of June stood at Rs 27.64 lakh crore up 16% over the Rs 23.79 lakh crore a year ago and at more than double the rate of credit growth.
This is a change from the fiscal year ended March 2024, post the acquisition of its parent in July 2023, when advances grew at 54% outstripped deposits growth of 26%, exposing the bank to an asset-liability mismatch.
Analysts say those concerns have now abated. Rohan Mandora, analyst at Equirus Securities, said while the bank is still some distance away from the historical growth rates of 1.5 times the broader banking industry, one can expect it to match system-level growth starting this fiscal year and have a better hold on its margins.
"HDFC Bank has been aggressive in cutting term deposit rates in the first quarter and has brought it in line with large private peers. Additionally, quarterly average CASA (current and savings accounts) growth has been much better in the first quarter. We thus believe that improvement in the incremental cost of funds for HDFC would be better than peers. They additionally have levers on loan mix/ liability mix change. We expect HDFC to have lower NIM (net interest margin) compression than larger private banks," Mandora said in a note.
HDFC Bank's average CASA deposits were Rs 8.60 lakh crore at the end of June 2025, up 6% over Rs 8.10 lakh crore a year ago.
Total CASA deposits increased 9% to Rs 9.37 lakh crore as of June 2025, but were lower by around 1% compared to the Rs 9.44 lakh crore reported at the end of March 2025. Total term deposits at Rs 18.27 lakh crore at the end of June 2025 were up 21%.
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