HDFC Bank, India’s largest private sector lender, has reported its business performance update for the second quarter (Q2) ending September 30, 2024. The bank showed steady growth in both advances and deposits, indicating a solid financial position amid a dynamic banking landscape.

Key Performance Highlights:

• Total Advances:
  HDFC Bank’s gross advances recorded a 7% year-on-year (YoY) increase, reaching ₹25.2 lakh crore as of September 30, 2024. On a quarterly basis, this marked a 1.3% rise over the June quarter.

• Total Deposits:
  Deposits saw robust growth, rising 15.4% YoY to touch ₹23.5 lakh crore. Sequentially, deposits increased by 3.1% compared to the previous quarter, showcasing a continued focus on expanding its deposit base.

• Total Advances Under Management:
  Including loans that were securitised or sold, HDFC Bank’s total advances under management stood at ₹26.34 lakh crore by the end of September 2024. This translates to an 8% YoY growth from ₹24.37 lakh crore in September 2023, and a 2.3% rise from ₹25.75 lakh crore in June 2024.

Detailed Segment-Wise Analysis:

• Retail Loan Segment:
  The retail loans grew significantly during the quarter, adding ₹33,800 crore. This demonstrates a strong consumer demand for retail credit and the bank’s ability to cater to it effectively.

• Commercial & Rural Banking Loans:
  The commercial and rural loan segments registered a ₹38,000 crore increase for the quarter, reflecting HDFC Bank’s focus on extending financial services to semi-urban and rural areas.

• Corporate & Wholesale Loans:
  The only segment to show a decline, corporate and wholesale loans fell by ₹13,300 crore as compared to the previous quarter, hinting at a possible slowdown or strategic shift in lending priorities in this category.

Deposit Growth Insights:

• CASA Deposits:
  The bank’s Current Account and Savings Account (CASA) deposits grew by 8% YoY to reach ₹8.84 lakh crore, but only saw a marginal 2.3% QoQ growth. This suggests stable customer retention in low-cost deposits, but limited new additions during the period.

• Time Deposits:
  HDFC Bank witnessed a surge in time deposits, which rose by 19.3% YoY to hit ₹16.17 lakh crore. Sequentially, time deposits were up 6.7% from ₹15.16 lakh crore in the previous quarter, indicating a preference for fixed-tenure deposits among customers.

Average Basis Growth:

• Advances:
  On an average basis, advances were ₹25.63 lakh crore, reflecting a 10.2% YoY increase and a 1.2% QoQ rise, pointing towards a consistent lending momentum.

• Deposits:
  Average deposits grew 15.4% YoY to touch ₹23.53 lakh crore, and registered a 3.1% increase QoQ, reinforcing HDFC Bank’s position as a trusted repository of public funds.

CASA Ratio and Liquidity Management:

• Average CASA Deposits for the quarter were reported at ₹8.08 lakh crore, up 7.3% YoY, but showed a slight decline of 0.3% from the previous quarter. The dip could be attributed to customers moving funds towards higher-yielding fixed deposits.

• Liquidity Coverage Ratio (LCR):
  HDFC Bank maintained a healthy LCR of 127% on average for the quarter, which is well above the regulatory requirement. This underscores the bank’s strong liquidity position and effective risk management.

Conclusion:

HDFC Bank’s second-quarter business update reflects steady growth across its key parameters, with strong retail and rural credit demand offsetting the sluggish corporate loan segment. The 15.4% YoY surge in deposits and the robust liquidity coverage ratio of 127% highlight its solid financial standing and prudent liquidity management. The bank’s performance in the second quarter positions it well for future growth, maintaining its status as a leading player in India’s banking sector.

Overall, HDFC Bank’s focus on retail expansion, deposit growth, and maintaining a diversified loan book will likely help it navigate through any macroeconomic challenges and capitalize on emerging opportunities in the market.

This blog-style news format highlights the key financial indicators and growth trends for HDFC Bank, offering a structured and easy-to-understand analysis of the Q2 business update.