Analyst Meet / AGM     22-Apr-24
Conference Call
Focus on improving on profitability and strengthening retail deposit franchise

HDFC Bank conducted a conference call on 20 April 2024 to discuss the financial results for the quarter ended March 2024. Sashidhar Jagdishan, MD&CEO of the bank addressed the call:


Post merger of HDFC Limited, HDFC Bank is completely new organization. There is a new starting point across all metrics. There is need to avoid any comparisons with the earlier bank as well as HDFC Limited.

Nine months post merger, the core metrics have remained stable, which demonstrates the underlying resiliency and the energy of the franchise. The resiliency of the institution continues despite a very adverse macro conditions.

The key focus over the medium to long term (2 to 3 years) is on improving profitability metrics like the RoA and the earnings per share by ensuring the sustainability of deposit franchise, especially the retail deposit franchise.

The bank will continue to invest in distribution, people and technology. The operating leverage will be harnessed over a period of time using enhanced tech and digital infrastructure.

The focus is on quality which is a balance between risk and margins.

During the times of heightened competition or irrational competition both on the liabilities and asset side, the bank would be happy to give up that kind of a share.

The bank has continued to gain market share in deposits and also kept the cost of deposits stable. The cost of incremental deposits continues to be range bound

The advances mix is more towards better yielding segments like retail and CRB.

The asset quality continues to be very pristine across all portfolio segments. Early indicators continue to be benign.

The bank expects incremental loan to deposits ratio will be lower for a couple of years. It would maintain stability in margins through others levers offsetting the impact of lower loan deposit ratio going forward.

The bank has control on asset and liability movements. The margins movement should be a function of how the bank substitute bonds that come up for maturity over a period of time with deposits.

The bank has witnessed one-off gains during the quarter, which has been utilized to create one-off provisions.

The bank has created floating provisions of Rs 10900 crore in Q4FY2024. This floating provisions does not reflect anything adverse in the portfolio and it is only for getting the balance sheet stronger.

These provisions also qualify for Tier 2 Capital classification within regulatory limits. These floating provisions amount to 59 basis points.

The ex-gratia provisioning of Rs 1500 crore for employees is for motivating the workforce.
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