HDFC Bank Q3 business update!

HDFC Bank has shown a stable growth in its business in the Oct-Dec 20 period. Here are a few highlights:

• Advances: HDFC Bank’s Advances grew 16% YoY to ₹10.82 lakh crore as of December 31, 2020. The Advances have grown by around 4% as compared to ₹10.38 lakh crore in Sep-20.
• Deposits:  The Bank’s deposits aggregated to approximately ₹12.71 as of Dec-20, a growth of around 19% on-year, and a growth of around 3% as compared to the previous quarter. 
• CASA ratio (Current Account Savings Account Ratio): CASA ratio which determines how costly the deposits of the bank are (Current Account deposits are a cheap source of funds), stood at 43% in Dec-20, an improvement from 39.5% in the same period previous year. 
• New CEO: The September quarter was the last under the leadership of Aditya Puri, who will step down by October-end. The bank then appointed Sashidhar Jagdishan as the new chief executive officer of the bank, effective 27th October. Jagdishan's appointment will be for a period of three years.

INDmoney Analysis

Despite the effects of the pandemic, the bank maintained a healthy deposit and advances growth rate. This was mainly due to a festive pick-up and continued momentum in working capital corporate loans. In the previous quarter, HDFC Bank said that the pandemic has led to decrease in loan originations, the sale of third-party products, and the use of credit and debit cards by customers. The pandemic has also affected the bank's collection efforts.While the management has not provided any update on recent asset quality behavior, HDFC Bank’s asset quality is expected to improve further in the quarter. This will be keenly monitored when the bank reports its quarterly results within the next two weeks.