Mumbai: HDFC Financial institution expects its credit-deposit (CD) ratio to return to pre-merger ranges of 85-90% by FY27, as India’s largest personal sector lender intensifies efforts to develop deposits sooner than loans. The technique is a part of the financial institution’s post-merger recalibration following its integration with HDFC Ltd in July 2023.
In an earnings name following its March quarter outcomes, chief monetary officer Srinivasan Vaidyanathan stated the financial institution will proceed aligning its deposit charges with the broader market in a declining rate of interest surroundings, whereas specializing in increasing its distribution community to realize deposit market share.
“We nonetheless stay competitively priced among the many varied massive 5 banks. Meaning there isn’t a explicit charge associated benefit on the financial savings deposits as such between us or peer banks,” Vaidyanathan stated. “There isn’t any aggressive differentiation that this presents, however we’re assured that our distribution power, buyer addition and engagement ought to hold us going from a market share gaining perspective.”
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HDFC Bank‘s CD ratio improved to 96.5% within the March-ended quarter, down from a post-merger peak of 110%, and 104.4% a 12 months earlier. Vaidyanathan stated as liquidity and financial progress improves, the financial institution is “nicely positioned to develop in deposits and loans.”
On a standalone foundation, India’s largest personal sector lender reported a web revenue of ₹17,616 crore for the March quarter, up from ₹16,512 crore a 12 months earlier. Internet curiosity earnings rose 10.3% year-on-year to ₹32,070 crore, supported by a modest enlargement in web curiosity margin to three.5% and a 5.4% improve in gross advances.
Following two consecutive 25 basis point cuts by the Reserve Bank of India, HDFC Financial institution has led this cycle of financial savings charge reductions amongst massive banks—decreasing curiosity on financial savings account deposits by 25 foundation factors final week, and on mounted deposits by as much as 50 foundation factors earlier this week. The speed strikes come because the financial institution seems to handle funding prices whereas recalibrating its credit-deposit ratio to pre-merger ranges.
Complete deposits rose 14.1% year-on-year to ₹27.1 trillion as of 31 March 2025. Time period deposits grew 20.3%, whereas CASA (present and financial savings account) deposits rose 3.9%, pushing the CASA ratio to 34.8%. The financial institution’s deposit market share stood at 11.1%, with its distribution footprint accounting for six% of the business whole. Deposit accretion per department surged to ₹300 crore, up from ₹80 crore final 12 months.
“We proceed to guide in gaining the market share,” Vaidyanathan stated, noting the financial institution’s deepening attain in semi-urban and rural areas. “Our endeavour is to get to what we have been pre-merger, after we sometimes operated between 85-90%.”
Whereas deposit progress has taken the lead, mortgage progress is anticipated to align with system-level progress in FY26 after lagging in FY25. The financial institution expects to outpace the market in FY27, regaining share on the lending facet.
To handle mortgage progress and funding, the financial institution will proceed to securitize belongings over the following three to 5 years. This could present “scope for us to develop sooner, maintaining with the market alternative that can come in order that we are able to take these loans to securitize and fund it in an optimised method,” Vaidyanathan added.
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Gross advances rose 5.4% year-on-year to ₹26.4 trillion as of 31 March 2025. Retail loans grew 9%, whereas business and rural banking loans rose 12.8%. In distinction, company and different wholesale loans declined 3.6%.
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Mortgage loans accounted for 30% of the whole ebook, with different retail loans comprising 19-20%, business and rural banking round 33%, and company and wholesale loans making up 16–17%, Vaidyanathan stated. He added that the best progress potential presently lies in retail lending, given the section’s comparatively low credit score penetration.
The financial institution’s bodily community expanded to 9,455 branches and 21,139 ATMs throughout 4,150 cities, up from 8,738 branches and 20,938 ATMs in 4,065 cities a 12 months earlier.
