By Siddhi Nayak and Nishit Navin
MUMBAI/BENGALURU (Reuters) -India’s HDFC Bank on Wednesday said it was aiming to grow its loan book in-line with the industry in the upcoming financial year, while pushing for faster deposit growth.
“As far as the deposit growth is concerned, there is no calibration… and we want to grow as fast and as much with the right customer base,” chief financial officer Srinivasan Vaidyanathan told reporters in a post-earnings call.
“Certainly, the endeavour is that deposits’ rate of growth will be far faster than the rate of loan growth,” he said, without providing a definite timeline.
HDFC Bank’s merger with parent HDFC in 2023 added a large pool of loans to its portfolio but a much smaller amount of deposits, putting it under pressure to increase the pace of raising deposits or slow loan growth.
Srinivasan said the bank expects to grow loans in line with the industry in fiscal year 2026, and faster than the industry in 2027.
He said HDFC Bank’s loan-to-deposit ratio (LDR), a key metric for banks to assess their liquidity position, was around 98% currently, and the bank expects LDR to go below 90% in the next few years.
The country’s biggest private lender posted a standalone net profit of 167.36 billion rupees ($1.94 billion) for the quarter ended Dec. 31, largely in line with analyst expectations, according to data compiled by LSEG.
Its deposits rose 4.2% quarter-on-quarter to 24.53 trillion rupees, while gross advances, or loans sanctioned and disbursed, rose 0.9%.
Its gross non-performing assets ratio (GNPA) worsened to 1.42% from 1.36% in the previous quarter, largely due to an increase in agricultural loans going bad.
Provisions for bad loans and other contingencies rose 17% sequentially to 31.54 billion rupees.
Net interest income – the difference between interest earned and paid – rose 2% from the previous quarter to 306.53 billion rupees.
Meanwhile, its core net interest margin shrank sequentially to 3.43% from 3.46% on total assets, and to 3.62% from 3.65% on interest-earning assets.
($1 = 86.3950 Indian rupees)
(Reporting by Nishit Navin in Bengaluru and Siddhi Nayak in Mumbai; Editing by Varun H K)
