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Informist, Saturday, Jul. 19, 2025

NEW DELHI/MUMBAI – HDFC Bank is not focusing on any particular portfolio to support credit growth, Chief Financial Officer Srinivasan Vaidyanathan said Saturday in a post-earnings media call. However, he sees the consumer segment providing great opportunities on this front. "The wholesale (segment) also provides the scope to grow and the employees in various wholesale relationships also provide retail growth opportunities," he said.

India's largest private-sector lender's gross advances rose 6.7% on year to INR 26.53 billion as of Jun. 30. Retail loans grew 8.1% on year to INR 15.22 trillion. Small and mid-market enterprises loans grew 17.1% on year and corporate and other wholesale loans grew 1.7%.

The bank expects to continue its deposit growth momemtum going ahead. However, Vaidyanathan added that the cost of funds and deposit rates have not yet fully factored in the cut of 100 basis points in the repo rate by the Reserve Bank of India's Monetary Policy Committee between February and June. HDFC Bank's average deposits were at INR 26.58 trillion as of Jun. 30, up 16.4% on year.

Further, the bank clarified that two-thirds of its credit book is linked to the external benchmark lending rate and around 3% is linked to the marginal cost of funds-based lending rate.

Vaidyanathan said the sharp increase in the lender's provisions in Apr-Jun was not on account of any particular anticipated risk. The bank's provisions and contingencies for the quarter jumped 455% on year to INR 144.4 billion. HDFC Bank made a floating provision of INR 90.00 billion and additional contingent provisions of INR 17.00 billion during the June quarter.

"We have taken this as an opportune stage to enhance the floating and contingent provisions," the chief financial officer said. "It is not meant for any specific portfolio. It is not meant for any specific anticipated risks. These are countercyclicial buffers to make the balance sheet resilient."

He said the private-sector lender's slippages have been range-bound, excluding the agriculture book. Slippages in the agriculture segment were high because of seasonal factors, he added. "Normally, based on the kharif and rabi season, June and December is when the bank has typically seen agricultural credit and slippages elevate," he said. "And then it starts to subside in the following quarters. So, this quarter is no different."

HDFC Bank's slippages rose to INR 90.00 billion in Apr-Jun, from INR 75.00 billion in the previous quarter. Of the total slippage, INR 22.00 billion was linked to agriculture.

Vaidyanathan said customer addition remains an important focus for the lender but branch additions in the financial year 2025-26 (Apr-Mar) will be lower than in FY25. In the June quarter, the bank added 44 new branches.

HDFC Bank reported a net profit of INR 181.55 billion for the June quarter, up 12.2% on year and higher than analysts' estimate. Shares of the bank closed 1.5% lower Friday at INR 1,957.40 on the National Stock Exchange.  End

Reported by Pratiksha and Akash Mandal

Edited by Rajeev Pai

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