HDFC Bank has released its business update for the quarter ending 30 September 2024 (Q2 FY25). The bank reported a year-on-year (YoY) growth of 7% in its gross advances, amounting to ₹25,190 billion as of the quarter’s end. This reflects an increase from ₹23,546 billion in the same quarter last year. HDFC Bank also recorded an 8% YoY increase in CASA (Current Account Savings Account) deposits, reaching ₹8,835 billion.
Investors closely monitoring the bank's performance can see steady growth, reinforcing its appeal to those looking to invest in stocks.
Advances show steady growth
As of 30 September 2024, the bank’s total advances under management, which include inter-bank participation certificates, bills rediscounted, and securitisation/assignment, stood at ₹26,335 billion. This marks an 8% growth compared to ₹24,374 billion a year ago. Additionally, this represents a 2.3% rise from ₹25,750 billion as of 30 June 2024.
During the quarter, retail loans increased by ₹338 billion, while commercial and rural banking loans grew by ₹380 billion. However, corporate and wholesale loans dipped by ₹133 billion compared to the previous quarter. The growth in advances reflects HDFC Bank’s strong foothold across various lending segments despite minor setbacks in the wholesale loans division.
CASA deposits rise, reflecting banking strength
HDFC Bank’s deposit growth remained robust during the second quarter, increasing by 15.1% YoY to reach ₹25,000 billion. This was a rise from ₹21,729 billion in the same period last year, with a quarterly growth of 5.1% from ₹23,791 billion as of 30 June 2024.
The bank’s CASA deposits, which reflect the bank's low-cost funding, grew by 8% YoY to ₹8,835 billion, up from ₹8,177 billion in Q2 FY24. Sequentially, there was a 2.3% increase from ₹8,636 billion in the prior quarter. This growth in CASA deposits highlights HDFC Bank’s ability to consistently attract low-cost funds, which is a crucial factor in maintaining profitability and growth.
Strategic securitisation moves
HDFC Bank also highlighted its strategic securitisation initiatives during the quarter. The bank securitised or assigned loans worth ₹192 billion, bringing the year-to-date total to ₹246 billion. This move is part of the bank’s broader efforts to diversify its portfolio and optimise capital efficiency, a strategy that is expected to contribute to its long-term financial health.
Block deals involving Morgan Stanley and Citigroup
In a related development, financial giants Morgan Stanley and Citigroup purchased shares of HDFC Bank worth over ₹755 crore via open market transactions. These two institutions collectively bought 43.75 lakh shares at an average price of ₹1,726.2 per share, indicating strong institutional confidence in the bank’s growth trajectory.
BNP Paribas’ arm, BNP Paribas Financial Markets, sold the shares through two separate block deals at the same price. In the previous week, BNP Paribas also offloaded shares of HDFC Bank for ₹543.27 crore.
Conclusion
HDFC Bank’s Q2 FY25 performance indicates steady growth, with gross advances and CASA deposits showing notable increases. The bank’s strategic moves, including securitisation initiatives and block deals involving major financial institutions, reinforce its market position. As HDFC Bank continues to demonstrate resilience and expansion, it remains an attractive choice for those looking to invest in stocks in India's financial sector.
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