By Siddhi Nayak
MUMBAI (Reuters) -HDFC Bank, India’s largest private lender, aims to bring its loan-to-deposit ratio (LDR) back down to its pre-merger levels of 85%-90% in 2026-27, its chief financial officer said on Saturday.
HDFC’s LDR has been elevated but declining since its merger with parent Housing Development Finance Corporation, which completed on July 1, 2023. LDR was at 96.5% at the end of March, down from 104% a year earlier, CFO Srinivasan Vaidyanathan said in post-earnings call.
The merger added a large pool of loans to its portfolio but a much smaller amount of deposits, putting it under pressure to raise deposits or slow loan growth.
The Mumbai-based lender’s gross advances, or loans sanctioned and disbursed, rose around 4% sequentially in the January-March quarter, while deposits rose 5.9% to 27.15 trillion rupees.
HDFC Bank expects its loan growth to be above that of the industry in 2026-27, Vaidyanathan reiterated, without divulging specific targets.
“The opportunity to grow in retail is higher than other segments,” the CFO said, while highlighting “intense” pricing pressure in corporate loan segments.
Earlier in the day, HDFC Bank logged a standalone net profit of 176.16 billion rupees ($2.06 billion) for the financial fourth quarter, up from 167.36 billion rupees in the previous three months and sharply above analysts’ estimate of 170.27 billion rupees, according to data compiled by LSEG.
Net interest income, the difference between interest earned and paid, rose 4.6% to 320.7 billion rupees, core net interest margin rose to 3.54% from 3.43% on total assets, and to 3.73% from 3.62% on interest-earning assets.
Excluding interest on an income tax refund worth 117 billion rupees, HDFC’s core net interest margin was 3.46% on total assets and 3.65% on interest-earning assets.
HDFC Bank’s asset quality improved, with its gross non-performing assets ratio falling to at 1.33% at the end of March from 1.42% three months earlier.
($1 = 85.4290 Indian rupees)
(Reporting by Siddhi NayakEditing by William Mallard and Peter Graff)
