HDFC Bank may maintain margins at 3.4-3.5% in coming quarters

HDFC BANK

HDFC Bank is expected to maintain the net interest margins in the range of 3.4-3.5 percent in the coming quarters, lender’s management said during the post earnings conference call.

The lender has been posting net interest margins in the range of 3.4-3.5 percent over last few quarters.

According to the investor presentation of the bank, net interest margins of the bank in January-March quarter stood at 3.5 percent, as compared to 3.4 percent in a quarter ago period and year ago period.

Bank’s management also said that loan and deposit growth of the bank is expected to bounce back to the premerger levels only by financial year 2026-27.

Additionally, they added that the growth in both the segment will be higher than the industry, management said.

Gross advances were at Rs 26.44 lakh crore as of March 31, 2025, an increase of 5.4 percent over March 31, 2024. Advances under management grew by 7.7 percent over March 31, 2024.

Retail loans grew by 9.0 percent, commercial and rural banking loans grew by 12.8 percent and corporate and other wholesale loans were lower by 3.6 percent. Overseas advances constituted 1.7 percent of total advances.

The Bank’s average deposits were grew 15.8 percent on-year to Rs 25.28 lakh crore in January-March quarter. In a year ago period, average deposit of the bank stood at Rs 21.84 lakh crore, and in a quarter ago period it stood at Rs 24.53 lakh crore. On a sequential basis, average deposit of the bank grew just 3.1 percent.

On the mortgage front, the management of the bank said that at the middle to the higher end level, there is quite an inventory available and a reasonable amount of demand. “At the highest level, of course, the lending is limited because they use their own funds. And the middle to the slightly above lending is required.”

Management said that the middle to the slightly above lending is required and the bank do see that competition on pricing is very intense there.