HDFC Bank's loan book grows 12% to ₹28.44 trn in Q3, CD ratio up at 98.5%

HDFC Bank, the country’s largest private sector lender, on Monday reported nearly 12 per cent year-on-year (Y-o-Y) growth in advances to ₹28.44 trillion during the October-December (Q3FY26) quarter, while deposits rose 11.5 per cent to ₹28.59 trillion.

 

After several quarters, the bank reported loan growth higher than deposit growth. The bank mobilised ₹57,700 crore of deposits during the quarter while credit disbursed expanded by ₹75,300 crore.

 

Accordingly, there was a 60 basis points (bps) sequential increase in the credit-deposit (CD) ratio of the bank in Q3, post the 285 bps increase in Q2.

 

The bank’s CD ratio now stands at 98.5 per cent at the end of Q3FY26.

 

The bank has been steadily bringing down its elevated CD ratio, following its merger with erstwhile mortgage lender HDFC Ltd, which became effective in July 2023. To address the spike in the CD ratio — peaking at around 110 per cent — the bank deliberately moderated its growth in FY25. Earlier, the bank had guided that it would grow broadly in line with the banking system in FY26, and thereafter accelerate growth to outpace system-wide expansion and gain market share in FY27.

 

Latest data from the Reserve Bank of India (RBI) suggests that credit growth in the period ended December 15 expanded to nearly 12 per cent Y-o-Y, while deposit growth slowed further to 9.35 per cent.

 

“In the current environment when HDFC Bank is saying they want to grow above system in FY27 — no way they are going to be even close to 90 per cent because practically it is a near impossible equation to achieve,” said Suresh Ganapathy, head of financial services research, Macquarie Capital.

 

“Reality of the matter is that they have to operate at a level much above 90 per cent, if indeed they want to maintain their loan growth aspirations. Good part is that the RBI seems to be relaxed. Across the board we have seen banks’ LDR having shot up this quarter and LDR is at all-time high levels. LDR aspirations have to take a back seat if loan growth is a priority because deposits simply aren’t coming for the system and they are a function of the system,” he said.

 

The banking system CD ratio is at an all-time high of over 81 per cent now as the gap between loan growth and deposit growth has further widened.

 

According to the bank’s exchange disclosure, average advances under management — adjusted for inter-bank participation certificates, bills rediscounted, and securitisation or assignment — stood at ₹28.64 trillion in Q3FY26, up 9 per cent Y-o-Y. Period-end advances under management were Rs 29.46 trillion, registering nearly 10 per cent Y-o-Y growth.

 

Average deposits during the quarter increased 12.2 per cent Y-o-Y to Rs 27.52 trillion. Of this, average current account savings account (Casa) deposits rose 9.9 per cent to ₹8.98 trillion, while average time deposits grew 13.4 per cent to Rs 18.53 trillion.

 

At the period end, Casa deposits stood at ₹9.61 trillion, up 10 per cent Y-o-Y, and time deposits were ₹18.98 trillion, up 12.3 per cent Y-o-Y.

 

Shares of the lender were trading in the red, down 2.37 per cent at ₹977.50.