The largest private lender, HDFC Bank, gave a solid push to deposit mobilisation in the fourth quarter of FY24, resulting in 7.5% growth or Rs 1.6 lakh crore in the last quarter alone, according to disclosures made by the bank to the exchange.
Its total advances rose 55% while aggregate deposits were up 26% on a year-on-year basis, but the share of low-cost deposits fell to 38% from 44% a year ago, the bank stated.
The bank’s shares rallied by 2.8% to close at Rs 1524 following the bank’s disclosures. The BSE Sensex was up 0.27%.
A report by Macquarie released soon after HDFC Bank disclosed the numbers to the exchange said, “For a large bank like HDFC Bank to deliver 7.5% QoQ deposit growth, Rs 1.7 trillion deposit mobilisation in a single quarter, and even improve CASA growth – CASA growth was higher than overall deposit growth – All a fantastic outcome.”
The share of the current and savings account, which constitutes low-cost deposits and is referred to as CASA, fell due to the bank’s merger with the parent housing finance company HDFC, which was effective July 1, 2023.
Aggregate deposits rose to Rs 23.8 lakh crore as of March 2024. In the fourth quarter alone, it mobilised Rs 1.6 lakh crore in deposits; of this, the share of retail deposits was Rs 1.28 lakh crore, while wholesale deposits were Rs 38,000 crore.
Retail deposits grew 27.8% over March 31, 2023, and around 6.9% over December 31, 2023; Wholesale deposits rose 19.4% over March 31, 2023, and around 10.9% over December 2023. In absolute terms, the bank’s CASA deposits stood at Rs 9.09 lakh crore as of March 31, 2024, up 8.7% over the previous year. In four quarter alone it rose 73,400 crore, of which, the share of retail Casa was Rs 47,900 crore.
Its gross advances stood at Rs 25.08 lakh crore for March 2024, as against RS 16.14 lakh crore a year ago.
Retail loans rose by 109%, commercial and rural banking loans rose by 24.6%, and corporate and other wholesale loans rose by 4.1% over the end of March 2023.
The report states that the stock is traded at 2x FY25E P/B (core), much lower than its historical averages.
“We believe this is a great time to add a quality franchise like HDFC Bank,” Macquarie report said.” Key risk is the inability to execute the merger well resulting in lower loan growth and/or profitability in the long run,” it added.
