HDFC Bank Ltd (HDFCBANK) — concall transcript | 31 December 2024

HDFC Bank reported stable credit metrics and 15% deposit growth in Q3 FY'25, with NIMs holding firm despite macro pressures. Management highlighted 8% AUM growth, 7% cost growth, and 68% PCR, while releasing INR 3 billion in contingent provisions from wholesale recoveries. Deposit growth of 16% included high-cost wholesale, and agri slippages impacted margins seasonally. Loan mix shows 70% floating rates (45% repo-linked), with priority sector lending shortfalls in SMF and weaker segments (~1 percentage point). The merger integration progressed with 96-97% liability account success and 1.9 million new accounts, though margins remain stable at 3.4%. Investment yields range from 6.5% to 7%, benchmarked against 10-year G-Sec sub 7%, with liquidity excess balances added at INR 1.2-1.3 trillion over two quarters. Borrowing costs sit at 7-8%, and cost-to-income ratio is stable at 40.5%. Mark-to-market losses of INR 2.5 billion from legacy equity positions affected results, but no fundamental changes occurred. Employee headcount stabilized at 210,000, with 2,500 additions planned. The bank targets loan growth acceleration in FY26-FY27, supported by productivity focus and controlled cost growth.