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Informist, Wednesday, Jan. 22, 2025

MUMBAI – HDFC Bank's business growth will be slower than the industry in the current financial year, in line with the industry in the next financial year and faster than the system by 2026-27 (Apr-Mar), the bank's management said in a post-earnings analyst call Wednesday.

"We have been growing in a very balanced manner in line with what we had committed to ourselves and to the world at large in terms of the glide path on the CD ratio (credit-deposit ratio), or the kind of growth levels that we are anticipating. As we speak, we have sufficient liquidity. We continue to grow our deposits faster than the system, we have sufficient capital, allowing us to be very comfortable to grow or capture market shares in the loans when macro turns favourable," Sashidhar Jagdishan, managing director and chief executive officer of the bank said.

Gross advances of the bank were up 3% on year to INR 25.43 trillion and the average deposits of the bank rose 16% on year to 24.53 as on Dec. 31. The bank's management said that the credit-to-deposit ratio of the bank stood at around 98%. The bank aims to bring down this ratio to 80-85% in the next 2-3 years, it said.

The management said the bank will continuously invest in people, branches and technology. "We will be investing in distribution, in people, in technology. Overall, we would want to ensure that we get productivity gains out of this. So if we all believe that our business growth is going to be in line with the system growth next year, our endeavour is to ensure that we are far more efficient in terms of how we spend and what we spend, and try and have efficiencies arising out of the cost." 

On Wednesday, the bank reported a net profit of INR 167.36 billion, up 2.2% on year for the quarter ended December. Sequentially, the bottom line fell 0.51%. The asset quality of the bank deteriorated in the reporting quarter. The bank said that most of the slippages were from the agriculture segment. The gross non-performing asset ratio of the bank was at 1.42% on Dec. 31, higher than 1.36% reported a quarter ago. Excluding the bad agricultural loans, the gross NPA ratio was at 1.19%. 

On Wednesday, shares of HDFC Bank closed 1.4% higher at INR 1,666.05 on the National Stock Exchange.  End

Reported by Kshipra Petkar

Edited by Saji George Titus

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