AI-generated · cited to primary sources · not investment advice
HDFC Bank (500180) Oct 2024 Filing Analysis
Does management do what it says?
In Q2FY25, average deposits grew by 15.5% YoY, while average AUM grew by 10.2% YoY, successfully maintaining slower credit growth relative to deposit growth. (3 met across 3 tracked commitments)
“Deposits; average YoY ↑ ₹ 3.15 tn (15.5%) ... AUM; average YoY ↑ ₹ 2.37 tn (10.2%)”
The bank added over 1,000 branches in the last 12-month period, meeting its annual expansion target. (3 exceeded, 2 in progress across 5 tracked commitments)
“The circular for the upper tier came that requires HDB to be listed by September '25. The process for that listing was kicked off.”
The bank intentionally slowed loan growth to 7.7% in FY25, which was lower than the industry average, to prioritize pricing and CD ratio adjustment. (1 met, 1 in progress across 2 tracked commitments)
“FY '25, we would probably grow slower than the system. FY '26, we may be at or around the system growth rate. FY '27, we should be faster than the system growth rate.”
Management intends to normalize the Liquidity Coverage Ratio (LCR) to historical median levels of 110% to 120% over time. — target: 110% to 120%
“our target that we normally tend to operate is between 110 to 120. ... And at some point, in time, I think it will normalize to the median levels at which we have operated.”
See the full cited Management analysis of HDFC Bank
Where does growth come from?
The bank is maintaining high liquidity levels, with the Liquidity Coverage Ratio (LCR) increasing significantly this quarter due to granular deposit mobilization. (1 accelerating across 1 signal)
“However, in the recent times, last quarter was 123, this quarter was 128. Again, it is driven by the fact that we get more deposits, granular deposits, retail-driven deposits.”
See the full cited Future Growth analysis of HDFC Bank
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