HDFC bank sees muted quarterly business; share drops 4.15% during trade today

HDFC Bank'Due to sluggish quarterly results, shares of HDFC Bank, which had been on a constant rise for the past few trading sessions, slumped more than 4% to trade at Rs 1,653.30 during trade today.

HDFC Bank declared its financial results for Q1FY25 (April–June 2024) recently, where its gross advances, which stood at Rs 24.87 lakh crore, saw a 53% YoY growth as compared to Rs 16.3 lakh crore in the last quarter. On a quarterly basis, though, it shrank by 0.8% from Rs 25.07 lakh crore as of March 31, 2024.

However, what concerns the experts is the bank's credit-deposit ratio, which stood at 105% for this quarter. The ratio signifies the proportion of the bank's lending against the deposits it has mobilized. But what is noteworthy is that the ratio is on a consistent decline, down from 112% last year, and 106% last quarter.

HDFC marks flat deposit growth rate, low CASA

The bank's deposits saw a 24.4% YoY increase to stand at Rs 23.79 lakh crore, up from 19.13 lakh crore during the same quarter last year. However, on a quarterly basis, deposit growth remained flat.

The bank's ratio of current and savings accounts to its total deposits, also known as the CASA ratio, fell to 36.3% as of June 30, 2024. For the quarter ended March 2024, this stood at 38.2%. Generally, a higher CASA indicates a lower cost of funds since no interest is payable on current accounts, while interest rates offered on savings accounts are also not very high.

On a YoY basis, CASA deposits jumped by 6.2% to stand at Rs 8.63 lakh crore, up from Rs 8.13 crore last year. However, as with other indicators, it saw a 5% fall on a quarterly basis, down from Rs 9.09 lakh. Its current account balances also saw net outflows of Rs 42,500 crore during the quarter.

On the other hand, the bank's time deposits saw 37.7% YoY growth, from Rs 11 lakh crore as of June 2023 to Rs 15 lakh crore in June 2024. On a quarterly basis, the bank's time deposits grew marginally, up from around Rs 14 lakh crore as of March 2024. During the last quarter, the bank's retail loan book grew by around Rs 18,600 crore, commercial and rural banking loans jumped by Rs 7,200 crore, while its corporate and other wholesale loan book dipped by around Rs 26,600 crore.

Improved Liquidity Coverage Ratio

The bank only saw quarterly improvement in its liquidity coverage ratio, which rose to 123%, up from 115% as of March 31st, 2024. A higher liquidity coverage ratio implies that the bank has enough liquid assets to cover its short-term obligations.

HDFC's share had touched a record high of Rs 1,791.90 per share on BSE earlier this week. This was because the market was expecting an increase in the bank's weightage in the MSCI Index, which would mean increased passive inflows of up to $4 billion.

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