HDFC Bank News (Q3 Business Update): Retail loans rise, CASA increases

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HDFC Bank Q3 update

HDFC Bank on 4th January shared its Q3 updates, and the numbers are looking good. The bank has reported a good 16% on-year growth in its loan book during the Sep-Dec 21 quarter. Here are the major highlights: 

HDFC Bank business update

Retail Loan Book - HDFC Bank, Indian’s largest private Bank, reported a 13.5% increase in retail loan books in the December quarter compared to December 2020. Sequentially, the retail loans increased by 4.5%. Under the home loan arrangement with HDFC Ltd, HDFC Bank has purchased loans worth Rs 7,46,800 crore via the direct assignment route.

Commercial and Rural Loans - On a Y-o-Y basis, the commercial and rural loans saw a massive increase of 29.5%. Sequentially, it increased by 6%. The bank also informed the exchange that its corporate and other wholesome loans increased by 7.5% Y-o-Y and 4.5% compared to the September quarter.

Increase in deposits - As of December 2021, the deposits amounted to Rs 14,46,000 crore compared to Rs 14,06,300 crore in the September quarter. Sequentially, the deposits were up by 4% and Y-o-Y the deposits were up by 17%. Wholesale deposits were up marginally by 1% over December 2020 and were lower by 1.5% compared to the September quarter.

CASA - The bank reported that its Current Account Saving Account (CASA) deposits increased by 24.6% Y-o-Y to Rs 6.81 lakh crore. Sequentially, CASA increased by 3.5%. CASA ratio for the December quarter stood at 47% as compared to 46.8% in September 2021 and 43% in December 2020.

HDFC Bank Q3FY22: Brokerage radar

Morgan Stanley: Global brokerage firm Morgan Stanley noted that the bank’s initial update points to strong growth in loans and retail deposits. The bank’s loan growth was broad-based across its lending segments. Morgan Stanley has a target price of Rs 2,050 on the shares. 

LKP Securities - has given a BUY rating on HDFC Bank share with a target price of Rs 2104. The brokerage believes that HDFC Bank’s credit will grow at a CAGR of 21% in FY21-24 on the back of digital adoption and technological enhancement. 

HDFC Bank is expected to release its Q3 earnings on January 15th, 2022. Stay tuned for our detailed analysis.