Bank's Robust Credit Growth Continues In November, Credit, Deposit Ratio Reaches Three-Year High: CareEdge

CareEdge Research Report

• Credit offtake continued to grow, increasing by 20.6% YoY to reach Rs 156.2 lakh crore for the fortnight ending November 17, 2023. This surge is also due to the impact of HDFC’s merger with HDFC Bank Ltd. and growth in personal loans. If we exclude the impact of the merger, credit grew at a lower rate of 16.2% YoY fortnight compared to last year’s growth of 17.2%. The outlook for bank credit offtake continued to remain positive for FY24.

• Deposits too grew by 13.6% YoY for the fortnight (including the merger impact). Excluding merger impact growth stood at 12.9%. Sequentially we saw a marginal decline of 0.3%. Deposit growth is expected to improve in FY24 compared to earlier periods as banks look to shore up their liability franchise and ensure that deposit growth does not constrain the credit offtake.

• The Short-term Weighted Average Call Rate stood at 6.79% as of November 24, 2023, compared to 6.13% on November 25, 2022, due to pressure on short-term rates.

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