HDFC Bank gains Rs 1.5 trn in deposits, CD ratio drops to 97% in Q4

As a result, HDFC Bank's credit-deposit (CD) ratio declined to 97 per cent at the end of March 2025, a drop of 800 basis points (bps) since March 2024

HDFC Bank, the country's largest lender, has gained ₹1.5 trillion in deposits in the quarter ending March 2025 (Q4FY25), marking the highest gain in any quarter during FY25.

 

In Q3, the bank gained ₹63,500 crore in deposits, while in Q2, the gain was ₹1.2 trillion.

 

According to the Q4FY25 pre-earnings update of the bank, its period end deposits grew to 27.14 trillion, up 14.1 per cent year-on-year (Y-o-Y) and around 6 per cent sequentially.

 

During the same period, its period-end advances under management grew 7.7 per cent Y-o-Y and 3.3 per cent sequentially to ₹27.73 trillion.

 

As a result, HDFC Bank's credit-deposit (CD) ratio declined to 97 per cent at the end of March 2025, a fall of 800 basis points (bps) since March 2024. 

 

The bank aims to accelerate the reduction of its CD ratio to pre-merger levels and has significantly slowed down its loan growth.

 

In FY25, the bank’s loan book grew at a slower pace than the industry average. However, in FY26, it plans to grow its loan book in line with the industry average. And by FY27, it expects to outpace the industry's credit growth.

 

Additionally, the bank has been securitising part of its loan to bring down the CD ratio. It has securitised ₹57,000 crore of loans in FY25 and in Q4 alone the bank has securitised ₹10,700 crore.

 

“In its Q4FY25 pre-quarter update, HDFC Bank reported deposit growth that was lower than our expectation at 14 per cent Y-o-Y (up 6 per cent Q-o-Q), a net sequential increase of ₹1.5 trillion versus our expectation of ₹1.7 trillion. Term deposit growth remained robust at 20 per cent Y-o-Y (5 per cent Q-o-Q). While deposit growth of 14 per cent Y-o-Y was lower than our expectation, this appears to be a good outcome given the liquidity scenario — system deposit growth was at 10 per cent levels,” said Suresh Ganapathy, head of financial services research, Macquarie Capital.

 

Moreover, Ganapathy, in his report, said that loan-deposit ratio was 97 per cent and declined 800 bps since FY24.

 

“In the short-to-medium term, we continue to expect margins to improve gradually as the declines and incremental deposits replace the high-cost borrowings of the former HDFC Ltd,” he said. 

 

HDFC Bank’s shares had jumped 1.3 per cent on Friday to close at ₹1,817 on the BSE, following the Q4 business update.