HDFC Bank says Q3 deposit growth outpaces loan growth

India’s HDFC Bank saw quarter-on-quarter deposit growth outpace loan growth in the three months to December 31, the country’s biggest private lender said on Saturday.

Deposits rose 4.2% to 24.53 trillion Indian rupees ($286.03 billion), slowing from 5.1% rise in July-September quarter, the Mumbai-based bank said.

Its low-cost current and savings account deposits rose 1.1%, it said.

Gross advances, or loans sanctioned and disbursed, rose 0.9% to 25.43 trillion rupees, slowing from 1.3% sequential growth in the previous quarter.

HDFC Bank has the most assets among all private banks in India. It merged with its parent HDFC in July 2023, adding a large pool of loans to its portfolio but a much smaller volume of deposits.

After the merger, the bank’s loan-to-deposit ratio rose to around 110%, putting it under pressure to boost deposits or slow loan growth.

Over the past few months, it has offered retail loans for sale to reduce its loan-to-deposit ratio, a key metric for banks to assess their liquidity position.

In the December quarter, HDFC Bank securitised 216 billion rupees of loans “as a strategic initiative”, it said.

Overall loan growth for Indian banks moderated for a fifth straight month in November, as lenders continued to rein in unsecured and personal loans after a central bank crackdown on “exuberant” lending.

Separately, HDFC Bank late on Friday said that the Reserve Bank of India had allowed it to acquire a stake of up to 9.5% in Kotak Mahindra Bank, AU Small Finance Bank and Capital Small Finance Bank within a year from the approval date.