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Strong loan growth, lower deposit growth; CD ratio rises, CASA mix declines

* Gross advances grew 22.7% YoY/8.8% QoQ to INR13.85t (above our estimated growth of 19.0% YoY/5.4% QoQ).

* Deposits rose 20.7% YoY/5.8% QoQ to INR14.52t (below our estimated growth of 22.2% YoY/7.1% QoQ) as a portion of FCNR(B) flows was utilized to reduce non-retail TDs in 2QFY27, which declined by 8.6% QoQ.

* The bank mobilized FCNR(B) deposits of USD10.6b (INR1.0t). Loans granted by the bank’s international branches against the same stood at USD4.6b (INR0.44t). Excluding these loans, gross advances would have grown by 18.8% YoY/5.3% QoQ, total deposits would have grown by 17.0% YoY/2.6% QoQ, and term deposits would have grown by 21.3% YoY/3.2% QoQ. LCs issued by the bank against FCNR(B) deposits stood at USD4.7b (INR0.45t).

* CASA deposits (end-period) grew by 10.6% YoY/1.5% QoQ, while term deposits grew by 27.3% YoY/8.4% QoQ. Consequently, CASA mix dropped to 36.5% from 38.0% in 1QFY27.

* Average deposits grew by 22.5% YoY/7.0% QoQ, while average CASA grew by 13.9% YoY/2.7% QoQ, and average TD rose 27.8% YoY/9.6% QoQ.

* Overall loan growth was ahead of estimates, while deposit growth was below estimates owing to retirement of non-retail TDs. Consequently, the CD ratio (on gross advances) rose to 95.4% from 92.7% in 1QFY27.

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