HDFC Bank's Deposit Growth Outpaces Credit Growth, Merging with HDFC Pace of Industry Expansion

Strategic Insights -

HDFC Bank's growth in deposits has consistently outpaced credit disbursements, leading analysts to believe that it will match the pace of business expansion for the broader banking industry this fiscal year. The bank's gross advances increased 7% to Rs 26.53 lakh crore in the first quarter ended June, but loan growth remains slower than the system-level growth of above 9%. However, the bank's year-on-year deposit growth at 16% outpaced its credit growth for the third successive quarter.

Key Takeaways:

  • HDFC Bank's deposit growth outpaced credit growth for the third successive quarter, indicating a return to normalcy.
  • The bank's total deposits at the end of June stood at Rs 27.64 lakh crore, up 16% over the Rs 23.79 lakh crore a year ago.
  • HDFC Bank's loan growth is still slower than the system-level growth of above 9%, but the bank's deposit growth has consistently outpaced credit growth.
  • Analysts believe that HDFC Bank will match the pace of business expansion for the broader banking industry this fiscal year.
  • The bank has been aggressive in cutting term deposit rates, bringing it in line with large private peers.
  • HDFC Bank's average CASA deposits were Rs 8.60 lakh crore at the end of June 2025, up 6% over Rs 8.10 lakh crore a year ago.
  • Total CASA deposits increased 9% to Rs 9.37 lakh crore as of June 2025, but were lower by around 1% compared to the Rs 9.44 lakh crore reported at the end of March 2025.
  • Total term deposits at Rs 18.27 lakh crore at the end of June 2025 were up 21%.

Rohan Mandora, analyst at Equirus Securities, stated that the bank is still some distance away from the historical growth rates of 1.5 times the broader banking industry, but one can expect it to match system-level growth starting this fiscal year. Mandora added that HDFC Bank has levers on loan mix/liability mix change, and expects the bank to have lower NIM (net interest margin) compression than larger private banks.

Statistics:

  • HDFC Bank's gross advances increased 7% to Rs 26.53 lakh crore in the first quarter ended June.
  • HDFC Bank's year-on-year deposit growth was 16% in the third successive quarter.
  • Total deposits at the end of June stood at Rs 27.64 lakh crore.
  • HDFC Bank's loan growth is still slower than the system-level growth of above 9%.
  • HDFC Bank's average CASA deposits were Rs 8.60 lakh crore at the end of June 2025.
  • Total CASA deposits increased 9% to Rs 9.37 lakh crore as of June 2025.
  • Total term deposits at Rs 18.27 lakh crore at the end of June 2025 were up 21%.

Sources:

  • Rohan Mandora, analyst at Equirus Securities
  • HDFC Bank's provisional business data