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Informist, Saturday, Apr. 18, 2026

--CONTEXT: Comments by HDFC Bank mgmt in post Q4 earnings analyst call 

--HDFC Bank: Thank govt, RBI, SEBI for support in recent difficult times 

--HDFC Bank: See demand in mortgage book holding up 

--HDFC Bank: Don't see any alarms for loan growth as of now 

--HDFC Bank: Deposit mobilisation picked up in Feb, Mar 

--HDFC Bank: Expect share of deposits of INR 30 mln or less to go up 

--HDFC Bank: Expect to maintain liquidity coverage ratio between 110-120% 

--HDFC Bank: Deposits yet to be repriced fully in line with repo rate cuts 

--HDFC Bank: Seeing good traction in auto, mortgages, personal loans 

--HDFC Bank: NIM expected to be rangebound going forward by

By Kabir Sharma and Durgesh Nandan

MUMBAI – HDFC Bank on Saturday expressed confidence in sustaining loan growth momentum and asset quality as it acknowledged regulatory backing during a challenging quarter marked by controversial developments in the bank's management.

Speaking in a post–March quarter earnings analyst call, the bank's management thanked the government, the Reserve Bank of India, and the Securities and Exchange Board of India for their support. "The government of India, the Reserve Bank of India and SEBI came out with statements in favour of the bank," a senior executive said, referring to the aftermath of the resignation of part-time chairman Atanu Chakraborty.

Chakraborty resigned in March, saying certain practices at the bank were not in line with his "values and ethics". This raised concerns about governance issues at the bank.

The management emphasised that the bank's fundamentals remained strong, with gross non-performing assets at around 1.15% and a provisioning buffer of nearly 120%. "We don't have any stress in our portfolio as we speak. Our focus is on profitability while pursuing growth opportunities," it said.

On the business outlook, the bank said it has not seen any warning signs on credit demand so far. "We have not seen any alarm bells go up as yet," it said, adding that it expects growth momentum to continue, subject to geopolitical developments. Loan growth improved to 12% in 2025-26 (Apr-Mar) from about 5% the previous year, and the bank expects to maintain a steady trajectory. Corporate lending is likely to remain supported by demand across sectors such as electronics, food processing, auto ancillaries, renewables and semiconductors, the bank said. 

At the same time, retail growth picked up meaningfully over the past three quarters. "We have seen a bigger step-up...across our wheels business as well as on the personal loan side," the bank said. It also highlighted resilience in its mortgage portfolio. "We've also seen consistent holding of demand on the mortgage book, and that has performed well," the management said, adding that mortgages remain a key driver of retail growth.

On the liabilities front, HDFC Bank said deposit mobilisation improved sharply towards the end of the quarter. "Somewhere from the later part of February to March, it has been quite easy and liquid and the possibility of deposit gathering is there," an executive said. The bank continues to focus on granular deposits, with those below INR 30 million forming a rising share of incremental deposits. "What constituted 31% of total net accretion...now constitutes 47%," the management said, adding that such deposits were more stable and less volatile.

HDFC Bank reiterated that it aims to maintain its liquidity coverage ratio in the range of 110–120%. "Somewhere in the middle is where we end up," the management said, indicating a stable liquidity position. On interest rates, the bank noted that deposit repricing is still incomplete. "The pricing on the deposit...is only about 40–50 basis points...so it's not fully compensated for what the asset pricing has moved," it said, highlighting the lag in transmission.

Given the evolving rate cycle, the bank expects net interest margins to remain stable within a narrow band. "It remains to be seen...but it's rangebound," the management said, citing the interplay of asset repricing, deposit costs and geopolitical uncertainties.

Despite this, the bank stressed that its focus was on overall returns rather than margins alone. "ROA is what we should focus on...the guiding principle is return on assets, loan growth and deposit growth, and quality of the balance sheet," it said.

HDFC Bank's net profit grew 9% on year in the March quarter as provisions fell 18% on year to INR 26.10 billion. Shares of HDFC Bank, which declared final dividend of INR 13 per share with Jun. 19 as the record date, ended 0.6% higher at INR 799.90 on the National Stock Exchange on Friday.  End

Edited by Avishek Dutta

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