Q4 Update: HDFC Bank’s Advances Rise 21%, Deposits Up 24%

HDFC Bank Ltd.’s advances and deposits rose in the quarter ended March at a time when smaller peers faced operational challenges and as the nation went under a lockdown following the novel coronavirus outbreak.

India’s largest private lender informed the exchanges today that its advances grew 6.3 percent quarter-on-quarter to Rs 9,93,000 crore while deposits rose 7.4 percent over the previous quarter to Rs 11,46,500 crore. On an annual basis, advances rose to a four-quarter high of 21 percent, while deposits grew 24 percent—the third consecutive quarter when the metric registered growth over 20 percent.

The bank’s CASA (current and savings account) ratio rose to 42 percent from 39.5 percent in the previous quarter and 42.4 percent a year ago.

That comes as private lenders like IndusInd Bank Ltd., RBL Bank Ltd. and Bandhan Bank Ltd. faced a spate of deposit withdrawals by state governments and Yes Bank Ltd. was placed under an RBI-mandated moratorium and rescue plan.

“These are good numbers in the present uncertain times,” Rati J Pandit, senior analyst at Quantum Securities, told BloombergQuint. “It indicates that present times belongs to lenders with size and scale, who are in a position to capitalise on the vacuum left by smaller lenders who have scaled down on their growth plans. Better deposit growth could be because of flight to safety amidst issues in smaller private banks.”

The bank also said that it purchased loans amounting to Rs 5,479 crore through the direct assignment route under the home loan arrangement with HDFC Ltd. in the fourth quarter. It had made similar purchases of Rs 4,258 crore in the December quarter and Rs 1,924 crore a year ago.

Siddharth Purohit, banking analyst at SMC Global Securities, said that while HDFC Bank’s loan and deposit growth has bettered expectations, its real challenge lies ahead. “Q4FY20 was largely over and hence the impact isn’t visible much. But going ahead it’s going to be tough times for all, including HDFC Bank,” he said. “But having said that, HDFC Bank has much stronger ability to absorb the ongoing disruption than other banks.”