Year-on-year (Y-o-Y), HDFC Bank’s deposit growth in Q2 FY25 outpaced its credit growth. At the end of the quarter, its deposit base stood at Rs 25 trillion, up 15.1 per cent Y-o-Y from the corresponding period a year ago, while its gross advances stood at Rs 25.19 trillion, up 7 per cent year-on-year.
The country’s largest private sector lender had earlier indicated that it would grow its advances at a slower pace than deposits, seeking to reduce its elevated loan-to-deposit ratio (LDR) to levels before mortgage financier HDFC merged with the bank effective July 1, 2023. The bank aims to reduce its LDR “as quickly as possible” while maintaining its commitment to profitable growth, said Sashidhar Jagdishan, the bank’s managing director and chief executive officer, during a post-earnings analyst call for Q1 results.
In Q2 FY25, 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 deposits stood at Rs 8.83 trillion in Q2 FY25, up around 8 per cent compared to Q2FY24. Such deposits are up 2.3 per cent compared to Q1 FY25. Its time deposits stood at Rs 16.16 trillion in Q2 FY25, 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.
The bank said that its advances under management stood at Rs 26.33 trillion in Q2 FY25, up 8 per cent Y-o-Y and 2.3 per cent sequentially. Retail loans grew by around Rs 33,800 crore in the quarter; 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 Q1 FY25.
