HDFC Bank expects slower credit growth in FY25; maintains steady NIMs amid rate cut prospects

Sashidhar Jagdishan, managing director and CEO of HDFC Bank

HDFC Bank's credit growth is expected to lag behind the industry in FY25 but align with the overall industry growth rate by FY26, according to Sashidhar Jagdishan, Managing Director and CEO of HDFC Bank, during the Q2FY25 conference call. By FY27, the bank anticipates outpacing the industry in credit growth.

Jagdishan also addressed the impact of potential future rate cuts by the Reserve Bank of India, stating that they are unlikely to significantly affect the bank's net interest margins (NIMs). While quarterly fluctuations in NIMs may occur due to the gradual nature of rate changes, the overall margin is expected to remain stable.

HDFC Bank reported a 5 percent increase in net profit year-on-year (YoY) to Rs 16,821 crore in the July-to-September quarter. The lender's net interest income (NII) rose 10 percent YoY to Rs 30,114 crore.

HDFC Bank's gross non-performing assets (GNPA) stood at 1.36 percent in Q2FY25, marginally higher than 1.33 percent at the end of the preceding quarter. HDFC Bank's net NPAs stood at 0.41 percent, increasing from 0.39 percent quarter-on-quarter (QoQ).

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Total deposits grew 15.1 percent YoY to Rs 25 lakh crore in the July-September quarter. In the July-September quarter, gross advances of the bank increased by 7 percent YoY to Rs 25.19 lakh crore. Retail loans grew by 11.3 percent, and commercial and retail banking grew by 17.4 percent. However, corporate and other wholesale loans were lower by 12 percent.