HDFC Bank share price falls over 3% as deposits, advances growth decline in Q1

HDFC Bank share price declined over 3% in early deals on Friday after the private lender reported its Q1 business update that showed a sequential fall in both, advances and deposits.

The largest private sector lender in the country HDFC Bank’s advances dropped 0.8% quarter-on-quarter (QoQ) to ₹24.87 lakh crore at the end of June 2024 from ₹25.1 lakh crore at the end of March 2024. 

The sequential decline in loan book was mainly due to continued shedding of low yielding corporate book, including that of erstwhile HDFC Ltd.

However, the bank’s advances grew 52.6% from ₹16.30 lakh crore on a year-on-year (YoY) basis.

Deposits in Q1FY25 were at ₹23,79,000 crore, registering a growth of 24.4% from ₹19,13,100 crore, YoY. Deposits were at similar levels compared to ₹23,79,800 crore as of March 31, 2024.

Excluding the July 2023 merger impact, the Bank’s deposits grew by 16.5% over June 30, 2023, HDFC Bank said in a regulatory filing

HDFC Bank’s low cost deposits current and savings accounts (CASA) ratio as a proportion of total deposits fell 36.3% at the end of June 2024 from 38.2% at the end of March 2024.

CASA deposits as of June 30 increased 6.2% to ₹8,63,500 crore from ₹8,13,000 crore, YoY, while it declined nearly 5% from ₹9,08,800 crore, QoQ.

Liquidity coverage ratio in Q1 improved to 123% compared to 115% in the previous quarter.

This week, HDFC Bank share price hit a record high of ₹1,791.90 apiece on the BSE on expectations of high passive fund inflows amid likely weight increase in MSCI index.

The latest shareholding pattern of HDFC Bank shows the ownership of foreign institutional investors (FIIs) in the bank dropped below 55%, which is expected to lead to an increase in HDFC Bank stock’s weightage in the MSCI index, leading to higher passive inflows.

At 9:17 am, HDFC Bank shares were trading 3.34% lower at ₹1,668.90 apiece on the BSE.