Banks’ efforts to shore up deposits by offering higher interest rates are bearing fruit, preliminary figures released for the September quarter showed. Private sector banks such as HDFC Bank, Yes Bank, CSB Bank and Karur Visya Bank have seen deposit growth outpace credit growth, reversing the sectoral trend of credit growth outpacing deposit growth over the past two years. Reported.
HDFC Bank, India’s largest private sector financial institution, grew its deposits by 15.1% year-on-year at the end of the September quarter, with total deposits reaching Rs 25 million. Deposits have since grown by 5%, with deposits worth Rs 1.2 billion added in the first quarter alone.
“Deposit growth is the most important metric for HDFC Bank and it looks healthy. When compared with key metrics of other banks, the liquidity environment has clearly improved,” said Pranav Gundrapalle, head of India. Ta. Bernstein’s financial officer.
HDFC Bank’s total advances rose 7% year-on-year to Rs 25.19 crore. Assets under management, including interbank participation certificates, rediscounts of bills and securitizations, grew by 8% to Rs 2,633 crore in Q2 2024. The bank said it securitized loans worth Rs 19,200 crore in the September quarter.
“We continue to expect margins to improve in the coming quarters as incremental deposits replace HDFC’s erstwhile high borrowings,” said Suresh Ganapathy, head of financial services research at Macquarie Capital. “Key risks include the inability to improve margins and return on assets from current levels.”
Private financial firm Yes Bank saw deposits increase by 18.3% year-on-year to 2.77 billion rupees and advances by 13.1% to 236,512 million rupees as of the end of September. The lender’s credit-to-deposit ratio was 85.3%, according to unaudited figures. Kerala-based CSB Bank reported a 25.17% year-on-year growth in deposits to Rs 31,841 crore, while advances increased by 19.59% to Rs 26,871 crore in the same period. Karur Vysya Bank posted: Deposits increased by 15.37% year-on-year to a total of Rs 95,839 million. The loan amount for the same period increased by 13.98% from the previous year to Rs 80,296 million.
Small finance bank Suryoday reported a 39% increase in deposits to Rs 8,851 crore and advances increased by 35% year-on-year to Rs 9,360 crore.
Meanwhile, the private sector Union Bank reported a 16% year-on-year increase in deposits to Rs 2.69 billion, while credit rose 19% to Rs 2.34 billion. Credit growth of state-run Bank of Baroda (BoB), Punjab National Bank (PNB) and Uko Bank continued to outpace deposit growth. BoB saw credit increase by 11.6% to Rs 11.4 million, but deposit growth remained at Rs 13.6 million at 9.1%. PNB’s credit expansion increased by 13% to Rs 10.6 million and by 11.4% to Rs 14.6 million. Yuko’s credit growth rate was 18.6% to Rs 1.98 billion and deposit growth was also 10.8% to Rs 2.76 billion.
Non-banking lender Bajaj Finance has announced that its assets under management (AUM) crossed Rs 1,000 crore in Q2 2024. Quarter-end AUM increased by 26% to Rs 1,020 crore. The company’s loan assets stood at Rs 89,860 crore at end-September 2024.
Mahindra Finance, another non-banking financial company, said total disbursements in the September quarter fell 1% year-on-year to Rs 13,160 crore. Business assets increased nearly 20% year-on-year to Rs 1.12 billion. The company’s Stage 3 financing was estimated at 3.8% compared to 4.3% last year. Meanwhile, Stage 2 assets were 6.4%. The collection efficiency was 96%.
