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Informist, Saturday, Jan. 17, 2026

 

--HDFC Bank: Focus on cutting CD ratio YoY progressively, QoQ rise just blip 

--CONTEXT: Comments from HDFC Bank mgmt in post earnings media call 

--HDFC Bank: Cannot give timeline for CD ratio returning to pre-merger level 

 

MUMBAI/NEW DELHI – HDFC Bank's management Saturday said it remains focussed on bringing down its credit-deposit ratio on a year-on-year basis, describing the recent sequential uptick as a temporary blip because of seasonality and market liquidity conditions, while declining to give a specific timeline for a return to pre-merger levels.

The bank's CD ratio stood at 98.7% at the end of December, close to recent highs, raising concerns about funding constraints after the merger with Housing Development Finance Corp. Ltd. The management, however, reiterated that the trajectory remains downward over the medium term, in a post-earnings media call following the lender's December-quarter results.

 

"The CD ratio is an important focus for sustainable profitability. We do want to keep directionally moving that lower," Chief Financial Officer Srinivasan Vaidyanathan said, adding that quarter-on-quarter movements should not be over-interpreted. "When you look at an annual basis, the objective is to keep moving it down as we go along."

 

Vaidyanathan said fluctuations on a quarterly basis were inevitable due to seasonality, liquidity conditions and the bank's participation in the broader credit growth cycle. "Quarter to quarter, moving up or down is perfectly fine...but on an annual basis, the objective is to keep moving it down," he said.

 

Responding to questions on whether loan growth could be moderated to accelerate a reduction in the CD ratio, the management said the bank remains committed to supporting system-wide credit expansion and does not see the current CD ratio as a binding constraint.

 

"We do want to participate in the credit growth of the country," Vaidyanathan said, noting that the speed of improvement in the CD ratio would depend on the availability of funding and rational pricing of deposits. He added that the bank remains confident of a "downward glide path" over time.

 

However, the management refrained from offering guidance on when the CD ratio could return to pre-merger levels of around 90%. "There's nothing more to add...than to say that the glide path that we work on is to keep moving that down," Vaidyanathan said. "The timing of how fast it can move, certainly we're not focused on quarter to quarter."

 

The management highlighted branch expansion and customer franchise maturity as key drivers of deposit growth over the medium term. The bank added 71 branches in the December quarter and 473 branches over the past 12 months, taking its total network to about 9,600 branches.

 

Distribution maturity plays a crucial role in deposit accretion, the CFO said, noting that branch productivity continues to improve despite rapid expansion. "Our branches are extremely productive...per-branch deposits are about 305 crore (INR 3.05 billion), best in class," he said.

 

HDFC Bank reiterated that it expects deposit growth to outpace loan growth over longer periods, even if quarterly trends remain volatile. "Certainly don't look at it quarter to quarter...but when you look at annually, when you look at multiple years, you do that," Vaidyanathan said.

 

The lender's bottom line rose 11.5% on year to INR 186.54 billion in the December quarter, against analysts' expectations of INR 184 billion. Shares of the bank, which declared its earnings Saturday, ended 0.6% higher on Friday at INR 931.10 on the National Stock Exchange.  End

 

Reported by Krity Ambey and Kabir Sharma

Edited by Ashish Shirke

 

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