HDFC duo's merger still looms over industry's credit growth
MUMBAI: The merger of HDFC and HDFC Bank in FY24, which slowed down bank credit growth in FY25, continues to remain a drag on overall lending, pulling industry credit growth into single digits in Q1FY26.
The combined entity's loan growth fell from 15-17% before the merger to 5.4% in FY25 and remained below the industry pace in the June quarter. According to RBI data, bank credit growth stood at 9.5% at the end of Q1, while deposits grew 10.1%. As against this HDFC Bank's outstanding loans and deposits grew 6.7% and 16.2%.
The slowdown was part of a strategy to restore balance sheet stability following a spike in the credit-deposit (CD) ratio and a skewed funding mix after HDFC's Rs 6 lakh crore loan book was absorbed.
Although HDFC Bank gained in market share and balance sheet size, its contribution to incremental credit growth remained limited, affecting the broader banking system's performance.
In a call with analysts on July 19, HDFC Bank MD & CEO Sashidhar Jagdishan said, "We slowed down our average advances or AUM growth to about 7% last year, in alignment with our strategic objectives to bring down the CD ratio from 110% at the time of the merger to about 95% as we speak today.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Emergency Generators in Duong Au Co: (Prices May Surprise You)
Emergency Generator | Search Ads
Search Now
Undo
This rate of growth in AUM has improved to 8% in the June 2025 quarter."
The home loan portfolio, which was HDFC's core strength, grew only 7% year-on-year, slower than 9% industry growth, reflecting weak momentum after the merger. Jagdishan said the mortgage segment has seen "intense competition" particularly from public sector enterprises offering rates around 7.1% to 7.3%. HDFC Bank has chosen not to match those rates, focusing instead on pricing loans 50-80 basis points higher while offering better service and targeting broader customer relationships.
The bank expects consumption to recover in both urban and rural areas, supported by the festival season. Jagdishan said sentiment, lower rates, and fiscal incentives could drive growth. He also pointed to rising momentum in the MSME segment, helped by early exports aimed at benefiting from potential tariff changes.
On staffing, the bank added about 4,000 employees this quarter, largely to support branches. Jagdishan said the bank is working towards having "more and more people customer-facing and maybe revenue-generating" as part of its long-term direction.
Stay informed with the latest
business
news, updates on
bank holidays
and
public holidays
.
AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India.com
6 minutes ago
- India.com
Fake embassy case: Investigation unearths shocking details related to Hawala money, shell company, and a name
New Delhi: The arrest of Harshvardhan Jain on charges of running a fake embassy from a two-storey bungalow in Ghaziabad's Kavinagar has exposed the layers of international fraud and hawala racket. The most surprising name that has emerged in the UP STF investigation is that of Ehsan Ali Syed, who is a native of Hyderabad and has now taken Turkish citizenship. Who is Ehsan Ali? Ehsan has lived in London for a long time and has been involved in many fraudulent activities. Ehsan Ali is the same person who has been considered very close to the controversial religious leader Chandraswami. On his advice, Harshvardhan Jain set up dozens of shell companies abroad. What does the investigation say? The investigation has revealed that these companies were used for hawala transactions, money laundering and large-scale economic fraud. Names of some of these fake companies are: State Trading Corporation Ltd (UK) East India Company UK Ltd (UK) Island General Trading Co LLC (Dubai) Indira Overseas Ltd (Mauritius) Cameron Ispat Sarl (Cameroon, Africa) Where were Ehsan Ali Saeed's businesses based? Ehsan Ali Saeed's company Western Advisory Group was based in Switzerland and Bahrain. This company arranged loans of about 70 million pounds (about Rs 735 crore) in the name of getting loans to Swiss companies between 2008 and 2011 and charged brokerage of 25 million pounds (about Rs 262 crore) in return. After getting the money, Saeed absconded. On the request of the Swiss government, London police arrested him in November 2022. After this, in July 2023, the Westminster Court approved his extradition. Finally, the Zurich Court of Switzerland sentenced Saeed to 6 years and 6 months in prison for fraud and absconding with the money. What was Harshvardhan's role? Interrogation of Harshvardhan Jain has revealed that he also has a connection with Ehsan Ali. Harshvardhan's involvement with Ehsan Ali is being investigated. Jain has several bank accounts opened in his name in India and abroad, which are being investigated. A case has been registered against Harshvardhan in Kavinagar police station under sections 318(4), 336(3), 338, 340. The STF is preparing to take his remand. This entire case goes to the depths of hawala network, shell companies and international racket of fraud, in which connections have been found from India to UK, Turkey, Switzerland, Mauritius and Africa.
NDTV
11 minutes ago
- NDTV
As Delhi's Water Bills Dues Cross Rs 1.4 Lakh Crore, Who Owes What?
New Delhi: Over Rs 1.4 lakh crore in pending water bills has accumulated at the Delhi Jal Board (DJB), officials have said. Of this, the domestic consumers owe the board Rs 15,000 crore, while a bigger chunk of the dues, Rs 66,000 crore, is owed by commercial users, with an additional Rs 63,000 crore due from various government departments - both Delhi and the Centre. Among the list of defaulters, the Municipal Corporation of Delhi (MCD) tops the list, owing Rs 26,147 crore. Within central government bodies, Indian Railways is the biggest defaulter with dues of Rs 21,530.5 crore, followed closely by the Delhi Police, which has not cleared bills amounting to Rs 6,097 crore. In total, Delhi government departments collectively owe for Rs 33,295.79 crore in unpaid water bills, while central government agencies contribute with another Rs 29,723.37 crore in pending dues. "This isn't just a delay, it's crippling our ability to maintain and upgrade basic infrastructure," a senior official told NDTV, adding, "Despite repeated reminders, the recoveries have been minimal." Some departments have relatively managed to stay current on their water bills The Delhi Metro Rail Corporation (DMRC) has comparatively lesser dues of Rs 1.4 crore, while the Delhi Transport Corporation (DTC) owes Rs 1.1 crore. However, the problem goes well beyond government offices. According to DJB data, commercial users collectively owe Rs 66,000 crore in dues, while domestic consumers are behind by Rs 15,000 crore. Water Minister Pravesh Verma said the government is gearing up for a major recovery push. "Notices will soon be issued to all the defaulter departments, both at the state and central level, to clear their dues," Mr Verma said. "The recovery plan will include high-level meetings with department heads, especially those with large pending bills, to discuss repayment timelines or instalment options," the water minister added. Officials say that unless the dues are cleared, especially from top government defaulters, planned upgrades, maintenance work, and expansion of essential infrastructure could come to a halt.
Time of India
19 minutes ago
- Time of India
Narrow escape for 150 after fire in GMC office basement
Ghaziabad: At least 150 people had a narrow escape while the basement of the GMC headquarters — board meetings are held there — was gutted after a major fire broke out at the building located in Navyug Market area on Friday. Over 150 employees — including women — were evacuated through the back door after the fire broke out at 5pm. Municipal commissioner Vikramaditya Singh Malik and mayor Sunita Dayal left the office when the fire started. Chief fire officer Rahul Pal said, "At 5.20pm, we received the information following which three fire tankers, along with the FSO, immediately departed from Kotwali fire station." The fire tenders brought the blaze under control after about 45 minutes. You Can Also Check: Noida AQI | Weather in Noida | Bank Holidays in Noida | Public Holidays in Noida Pal said, "The fire started in the control unit/electric panel located in the basement meeting hall of the civic body office and reached the first floor via the electric duct. Fire service personnel extinguished the fire completely by pumping water from a motor fire engine. The fire incident resulted in damage to 10 to 12 chairs, an air conditioner and the false ceiling in the basement meeting hall." Mohan Sharma, a GMC employee, said, "We were in the office when we noticed smoke in our cabins. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like American Investor Warren Buffett Recommends: 5 Books For Turning Your Life Around Blinkist: Warren Buffett's Reading List Undo We rushed out only to see plumes of smoke billowing from the basement. An alert was sounded and employees were evacuated." "Since it was not advisable to use the lift and the stairs leading to GMC's four-storey building pass through the basement, employees were asked to use stairs on the opposite side," Sharma added. Vibha, a female employee, said, "We panicked when we heard that the basement was on fire and even though we managed to escape using the stairs, we had to cover our faces as the smoke had spread all around."
