HDFC Bank has reported that deposit growth in the second quarter outpaced its loan growth, marking a shift in its financial momentum.
The bank’s gross advances, or loans sanctioned and disbursed, rose by 1.3% to Rs 25.19 lakh crore in the quarter ending September, following a slight 0.8% decline in the previous quarter. Retail loans increased by Rs 33,800 crore, while commercial and rural banking loans saw a rise of Rs 38,000 crore from the previous quarter.
However, corporate and wholesale loans declined by Rs 13,300 crore during the same period, according to the bank’s statement. Deposits grew by 5.1% quarter-on-quarter to Rs 25 lakh crore, reversing the flat growth seen between April and June. HDFC Bank also saw a 2.3% increase in low-cost current account and savings account (CASA) deposits.
Following its merger with parent company HDFC in July 2023, the bank inherited a large pool of loans but fewer deposits, causing its loan-to-deposit ratio (LDR) to surge to around 110%. This ratio, a key indicator of liquidity, had put the bank under pressure to either increase deposits or slow down loan disbursement.
In response, HDFC Bank had committed to reducing the LDR by growing deposits faster than loans in the coming quarters. In a strategic move, the bank also securitised Rs 19,200 crore in loans during the second quarter, bringing the total securitisation for the year to Rs 24,600 crore.
At 10:45 am, shares of HDFC Bank were trading 0.20% lower at Rs 1,678.80 on the Bombay Stock Exchange (BSE).