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Deposit growth on track; sell-down of advances results in lower advances growth

HDFCB released its 3QFY25 business update. Following are the key takeaways:

* Gross advances grew 3% YoY/0.9% QoQ to INR25.4t. Gross of transfers through IBPCs and bills rediscounted, the loan book grew 6.1% YoY/1.9% QoQ.

* As per the bank’s internal classification, domestic retail loans grew 10% YoY, commercial & rural banking grew 11.5% YoY, and wholesale loans decreased by 10.3% YoY.

* Deposits increased by 15.8% YoY/2.5% QoQ to INR25.6t. CASA deposits declined 1.2% QoQ (up 4.4% YoY), whereas term deposits grew 22.7% YoY/4.6% QoQ to INR16.9t.

* Growth in advances was lower as the bank sold down its advances book. On the deposit front, the bank added ~INR0.6t in 3Q, which was slightly below estimates. However, deposit growth remained healthy at 15.8%, outperforming the systemwide deposit growth of 11.5%. 

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