India’s largest private sector lender HDFC Bank on Wednesday reported 57.7% year-on-year (YoY) growth in its gross advances in the September quarter while deposits grew about 30% YoY in the quarter.
The lender informed exchanges that its gross advances aggregated to approximately Rs 23,54,500 crore as of September-end, a growth of around 57.7% on a YoY basis and a growth of around 44.4% on a quarter-on-quarter (QoQ) scale.
Grossing up for transfers through inter-bank participation certificates and bills rediscounted, the bank’s advances grew by around 60% YoY and 43% QoQ.
Domestic retail loans recorded a growth of 111.5% YoY, commercial & rural banking loans grew by around 29.5% while corporate & other wholesale loans grew by around 8%.
On the deposit side, HDFC Bank’s deposits aggregated to approximately Rs 21,73,000 crore, a growth of around 29.9% YoY and 13.6% QoQ.
India’s most valued lender said its CASA deposits aggregated to approximately Rs 81,7500 crore as of September-end, a growth of around 7.6% YoY and 0.6% QoQ.
HDFC Bank’s CASA ratio stood at around 37.6% as of September 30, 2023, as compared to 45.4% as of September 30, 2022, and 42.5% as of June 30, 2023.
Home loan disbursals during the first quarter post-merger were the best ever at Rs 48,000 crore. “This is a growth of 14% over the quarter ending June 30, 2023, and a growth of 10.5% over the quarter ending September 30, 2022,” it said.
Having lost around 3% in the last 2 weeks, HDFC Bank shares were trading 0.4% higher today at Rs 1,514 on BSE following the release of the quarterly business update.
In the meantime, HDFC Bank has implemented a leadership overhaul to split retail loans into mortgage and non-mortgage segments, with two group heads and two regional heads for branch banking, which would be pivotal for liability growth – a key investor metric for the biggest Nifty constituent by weighting.
While global brokerage firm Nomura had downgraded HDFC Bank citing merger-related stress points, Jefferies has retained a buy call on the stock with a target price of Rs 2,030.
“After having emerged as the 7th largest bank in the world, HDFC Bank now looks attractive for global portfolios as well. It trades at 2.2x 12mth fwd adj. PB and 15x 12mth fwd adj. PE,” Jefferies said, adding that its strong retail asset portfolio, improving deposit franchise, synergies from a merger with parent HDFC and branch expansion to support deposit growth will help the bank deliver 16-17% earnings growth in the next three years.
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