Informist, Saturday, Apr. 19, 2025

MUMBAI – HDFC Bank aims to keep the net interest margin range-bound going forward, Chief Financial Officer Srinivasan Vaidyanathan said in post-earnings press conference Saturday. The bank's net interest margin on total assets was 3.54% in Jan-Mar, as per the earnings released earlier in the day.

"Prior to the merger (of Housing Development Finance Corp.), we were moving in a narrow band...since the merger we have been moving between 3.6% to 3.7% on interest-earning assets basis," Vaidyanathan said. "So we have moved in the narrow band...and all we can tell is that we manage it tightly between assets and liabilities. So when you look at the shorter time period, quarter to quarter level, it can be moving around a few basis points up and down, but you have to look at it over a year or linger where you will see that there is a stability in margin."

Vaidyanathan said the aim is to attain the credit-deposit ratio of 85%-90% by the end of FY26. The endeavour is to improve the credit-deposit ratio further below the current 96.5%, he said. "Coming to the CD ratio part...we have come to 96.5%; when the merger happened we were almost at 110%...yes our endeavour is to get to what we were pre-merger which we typically operated between 85% to 90%," Vaidyanathan said.

Earnings released Saturday showed that the net profit of HDFC Bank rose 6.7% on year to INR 176.16 bln in Jan-Mar, helped by a sharp fall in provisions. The provisions fell more than 76% to INR 31.93 billion in the quarter ended March as the bank did not make any floating provisions. In the year-ago, it had made floating provision of INR 109.00 billion.

Further, Vaidyanathan said the bank will continue to have an increasingly larger chunk of deposits, going forward. In terms of loans, the bank aims to keep up with the industry rate of growth for some time, before aiming to gain the market share.

"We do expect that in FY26 our loan growth should be at about the market rate of growth," Vaidyanathan said. "So that means from where today we have a 7.7% loan growth to get market rate of growth and then in the following year have that premium growth that we are used to, gaining market share even on loans."

As of Mar. 31, net advances of the bank were INR 26.20 trillion, up INR 1.35 trillion on year. Deposits with the bank were INR 27.15 trillion as of Mar. 31, up INR 3.35 trillion from year ago. Shares of HDFC Bank closed 1.5% higher at INR 1,906.70 on the National Stock Exchange on Thursday. Markets were closed on Friday for Good Friday. End

Reported by Sourabh Kumar

Edited by Ashish Shirke

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