Highlights:

The bank is progressing well on the journey of normalizing CD ratio. The bank has recorded strong 16% growth in deposit gaining market share, despite a challenging macro environment. The liquidity conditions touched a peak deficit of Rs 2-2.5 lakh crore in Q3FY2025.

NIM of the bank has remained stable and rangebound, despite headwind from tight liquidity.

The bank has added 1052 branches in the last 12 months, but still managed to control cost very tightly with cost growth at 7% showing productivity gains.

The bank has continued to maintain stable credit cost and slippages, showing the strength of the institution.

The bank is placed robustly growing in line with given commitment. It has sufficient liquidity with faster deposit growth.

The bank is well capitalized to grow and capture market share when macro turns.

The bank has been meeting PSL targets at aggregate level. There are some shortages of around a percentage point in the marginal farmer and weaker section, which the bank aims to meet organically in the rest of the year.

The provision coverage ratio was at 68%, while excluding agriculture the PCR was higher at 71%.

The fresh slippages of loans were impacted by the agriculture sector, while slippages excluding agriculture were stable.

Interest income refund was Rs 200 crore in Q3FY2025 compared to rupees 500 Crore in the previous quarter

In case of agri NPAs, the interest income for 1 year has to be reversed.

The cost of borrowing stands at 7.8%, most of which are from the HDFC.

For the unsecured loans, the bank 100% provisioning on 90-120 days overdue and write offs at 150 days overdue.

The asset quality of loan book across segments remains stable.

GNPA ratio increased to 1.42% from 1.36% in the previous quarter. Excluding the agricultural segment, GNPA has remained flat at 1.19%.

Capital adequacy ratio stood at 20%, with a CET1 ratio of 17.5% end December 2024.

Out of the 4 million HDFC customers, the bank has opened accounts for 1.9 million customers. For 2.5 lakh customers, the bank has also started offering more products like credit cards.

The cost to asset ratio stands at 1.93%.

The risk weight density – risk weighted asset to asset ratio at 67% is much lower compared to the industry peers.

Bank expected the share of retail assets to increase, aiding an improvement in yields.

The bank has enough liquidity and it is well capitalised to grow when the opportune time comes

The bank expects loan growth to be below system growth in FY25, in line with the system in FY2026 and above system growth in FY2027. The bank aims to reduce CD ratio below 90% in next 4-5 years

About 70% of the loan book is floating rate and 30% is fixed rate. About 45% of the floating road link is repo linked.

About 15 bps of NPAs of the bank are performing but they have been marked as NPA because they were restructured earlier.

The microfinance loan book is less than 1% of the loan book and 5% of the employees are engaged in the microfinance segment.