Company Update : HDFC Bank Ltd By Motilal Oswal Financial Services Ltd
Strong business growth; CASA ratio improves
CD ratio drops to 96.5%
HDFCB released its 4QFY25 business update. Following are the key takeaways:
* Gross advances increased by 5.4% YoY and 4.0% QoQ to INR26.4t. Excluding transfers via IBPCs and bills rediscounted, the loan book expanded by 7.7% YoY and 3.3% QoQ.
* Based on the bank’s internal classification, retail loans rose by 9% YoY, Commercial & Rural banking grew by 12.8% YoY, whereas wholesale loans declined by 3.6% YoY.
* Deposits witnessed strong growth of 14.1% YoY and 5.9% QoQ to INR27.1t. CASA deposits saw robust growth of 8.2% QoQ (up 3.9% YoY) to INR9.4t, while term deposits increased by 20.3% YoY and 4.7% QoQ. Bank’s average deposit growth remained modest at 3.1% QoQ (15.8% YoY), while average CASA growth was subdued at 1.4% QoQ (5.7% YoY).
* HDFC Bank’s business growth remained solid, with advances growth surpassing our estimates. Deposit growth was strong, outperforming system deposit growth (in line with our estimates). CASA deposits saw robust expansion, driving the CASA ratio to 34.8% (up 79bp QoQ). Consequently, on a calculated basis, the CD ratio declined to 96.5% in 4QFY25, down 177bp QoQ
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