Latest news with #SrinivasanVaidyanathan
Time of India
01-05-2025
- Business
- Time of India
Private banks raised lending charges in March despite policy rate cut in February
Sustained liquidity infusion by the RBI helped the banking system turn a cash surplus only in the last few days of March, with a deficit standing in the way of accelerated transmission of the first reduction in policy rates in five years. The daily average for system liquidity in March stood at a deficit of Rs 1.23 lakh crore, RBI data showed. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads MUMBAI: Private banks counter-intuitively charged more on fresh rupee loans in March-the highest for five months despite a quarter percentage point cut in policy rates three weeks before-as tight liquidity and high funding costs prevented such lenders from lowering the borrowing rate for the average loan Reserve Bank of India ( RBI ) data showed the average lending rate on fresh rupee loans by private banks climbed 12 basis points from February to 10.32% in be sure, liquidity was tight in March and private banks had replaced their certificates of deposit (CD) and bulk deposits at a higher rate, consequently causing an unexpected and counter-intuitive inflation in borrowing costs. Private banks often rely on CDs and bulk deposits to boost the liability side of their capital structures. The weighted average domestic term deposit rate (WADTDR) for fresh rupee deposits rose to 6.65% in March from 6.49% a month earlier, reflecting continued upward pressure on funding liquidity infusion by the RBI helped the banking system turn a cash surplus only in the last few days of March, with a deficit standing in the way of accelerated transmission of the first reduction in policy rates in five years. The daily average for system liquidity in March stood at a deficit of Rs 1.23 lakh crore, RBI data response to the first rate cut in nearly five years has been uneven across the banking system. Only foreign banks have significantly passed on the benefit of the policy easing, reducing their average lending rates by 24 basis points to 8.93% in March. Public sector banks, on the other hand, also saw a marginal increase of two basis points, with average lending rates reaching 8.66%.Foreign banks are less dependent on CDs and deposits. Hence, they are able to pass on the rate cut benefit more quickly to borrowers, experts the RBI data reflects a notable spread of 166 basis points between the lending rates of private and public sector lenders have been vocal about the pressures they face due to narrowing spreads and pricing mismatches."Loan spreads have remained compressed compared to bond spreads. Even when bond spreads move, loan spreads don't adjust accordingly, they're actually coming down," said Srinivasan Vaidyanathan, CFO of HDFC Bank , during a recent post-earnings analyst call. "We are selective in our approach, if a loan meets our quality and pricing benchmarks, we go ahead; otherwise, we're comfortable letting it go. We're not chasing balance sheet growth at the expense of returns." ICICI Bank also acknowledged intensifying competition."There are very large, capable competitors who are also priced meaningfully below us. It does create some challenges in terms of growth, but I guess that's part of life. So, we will have to keep dealing with it as we go along and look at how we can drive other levers to continue to maintain profitable growth," said Anindya Banerjee, Group CFO, ICICI Bank in the recently held post earnings analyst believe the full transmission of the RBI's February and April rate cuts is yet to be realised due to lingering deposit cost pressures. They expect the impact to become more visible in the June quarter. Additionally, a significant share of loans still being linked to the Marginal Cost of Funds-Based Lending Rate (MCLR) has contributed to the slower transmission, given its longer reset cycles."The uneven pace of rate transmission is largely due to the mix of credit portfolios across fixed and floating interest rate structures, and the varied spreads charged by banks," said Aastha Gudwani, India chief economist at Barclays
&w=3840&q=100)
Business Standard
21-04-2025
- Business
- Business Standard
HDFC Bank stock hits 52-week high after Q4 net profit rises 7%
Shares of HDFC Bank on Monday ended over 1 per cent after the firm reported a 7 per cent growth in consolidated net profit for the March quarter. The stock ended at Rs 1,927.55 apiece, up 1.10 per cent on the BSE. During the day, the stock rallied 2.27 per cent to Rs 1,950 -- its 52-week high level. On the NSE, shares of the firm went up by 0.97 per cent to Rs 1,925.20. Intra-day, the stock climbed 2.30 per cent to hit the one-year peak of Rs 1,950.70. The company's market valuation soared Rs 16,069.67 crore to Rs 14,75,003.99 crore. The 30-share BSE Sensex jumped 855.30 points or 1.09 per cent to settle above the 79,000 mark at 79,408.50. The NSE Nifty climbed 273.90 points or 1.15 per cent to close at 24,125.55. HDFC Bank on Saturday reported a 7 per cent growth in consolidated net profit for the March quarter to Rs 18,835 crore, but flagged issues around pricing in home and corporate loan segments, which are impacting its loan growth. On a standalone basis, the largest private sector lender reported a net profit of Rs 17,616 crore for the reporting quarter against Rs 16,512 crore in the year-ago period. The net interest income moved up 10.3 per cent to Rs 32,070 crore during the reporting quarter, on a slight expansion in the net interest margin to 3.5 per cent and the gross advances growth coming at 5.4 per cent. HDFC Bank's chief financial officer Srinivasan Vaidyanathan said the bank had consciously taken a call to slow down loan growth and focus on the liabilities piece for the fiscal, and added that the deposit growth was over 15 per cent.
Hindustan Times
21-04-2025
- Business
- Hindustan Times
ICICI, HDFC banks share prices hit fresh records post March quarter earnings
Shares of HDFC Bank Ltd. and ICICI Bank Ltd. surged to record highs on Monday after both posted stronger-than-expected earnings over the weekend. Brokerage firm Motilal Oswal Financial Services Ltd. revised its FY26 earnings estimate for HDFC Bank up by 3% and raised ICICI Bank's price target by 3% to ₹1,650. Axis Bank Ltd., India's third-largest private lender, is set to report its earnings on Thursday. Meanwhile, the implied volatility spread between the Nifty Bank Index and the broader Nifty 50 Index has narrowed to levels last seen in early April, reflecting improved trader sentiment towards banking stocks. As of Thursday's close, the April 55,000-rupee call option had the highest open interest, indicating further potential upside for the bank index. On Monday, the Nifty Bank Index jumped as much as 1.9%, crossing the previous peak set in September. Since April 2, when the US announced reciprocal tariffs, the index has risen over 7%, outpacing the Nifty 50's more than 3% gain, according to Bloomberg data. Analysts believe Indian banks remain largely insulated from global trade tensions due to their limited international exposure. They also point to solid fundamentals across most lenders. 'Overall outlook for banking stocks is positive,' Sandip Sabharwal, founder of research house told Bloomberg. 'Most banks have significant capital adequacy ratios, good additional provisions as buffers as well as accelerating growth prospects as monetary policy eases and liquidity improves,' he added. ICICI Bank shares rose over 2% on Monday morning, day after the lender posted a 15.7% rise in consolidated net profit for the March quarter, reaching ₹13,502 crore. The stock touched a 52-week high of ₹1,437 on the BSE, gaining 2.15%, and similarly climbed 2.08% to ₹1,436 on the NSE. On a standalone basis, ICICI Bank posted a net profit of ₹12,630 crore for Q4 FY25, an 18% increase from ₹10,708 crore in the same quarter last year. Core net interest income rose 11% to ₹21,193 crore, and non-interest income (excluding treasury) grew 18.4% to ₹7,021 crore. The bank also improved its asset quality, with gross NPAs falling to 1.67% in March 2025 from 1.96% in December 2024. Shares of HDFC Bank climbed more than 2% on Monday, hitting a one-year high of ₹1,950 on both the BSE and NSE. This came after the bank reported a 7% year-on-year increase in consolidated net profit for the March quarter, reaching ₹18,835 crore. On a standalone basis, net profit stood at ₹17,616 crore for the quarter, up from ₹16,512 crore in the same period last year. Net interest income rose 10.3% to ₹32,070 crore, driven by a slight rise in net interest margin to 3.5% and a 5.4% growth in gross advances. However, the bank flagged concerns around pricing pressure in home and corporate loans, affecting loan growth. CFO Srinivasan Vaidyanathan noted that HDFC Bank chose to moderate loan expansion and instead prioritise deposits, which grew over 15% during the fiscal. (With inputs from agencies)
Yahoo
20-04-2025
- Business
- Yahoo
HDFC Bank Ltd (HDB) Q4 2025 Earnings Call Highlights: Strong Deposit Growth and Pristine Asset ...
Credit Deposit Ratio: Reduced from 110% at the time of merger to 96% as of March 2025. Deposit Growth: Deposits have grown faster than the system and loans. Cost Management: Costs remain under tight control. Asset Quality: Asset quality remains pristine. Release Date: April 19, 2025 Warning! GuruFocus has detected 7 Warning Signs with HDB. For the complete transcript of the earnings call, please refer to the full earnings call transcript. HDFC Bank Ltd (NYSE:HDB) has successfully reduced its credit deposit ratio from 110% to 96%, indicating improved financial stability. The bank's deposits have grown faster than the system and its loans, showcasing strong deposit mobilization. Asset quality remains pristine, which is a unique selling proposition for HDFC Bank Ltd (NYSE:HDB). The bank is well-positioned to benefit from technological advancements, which are expected to enhance productivity and efficiency. HDFC Bank Ltd (NYSE:HDB) has maintained a stable net interest margin (NIM) within a narrow band, demonstrating effective financial management. The global macroeconomic outlook remains uncertain due to trade tariff-related measures, potentially impacting growth. There is a concern about the impact of geopolitical uncertainties on corporate deposits, which are short-term in nature. The bank faces challenges in meeting priority sector lending requirements, particularly in the small and marginal farmer segment. There is intense competition in the lending market, particularly from public sector institutions offering low pricing. The bank's CASA ratio has been adversely affected by customer preference for time deposits, impacting cost of funds. Q: Can you explain the drivers behind the NIM expansion this quarter and how it might progress over the next year? A: Srinivasan Vaidyanathan, CFO, explained that the NIM operated in a narrow band of 3.4% to 3.5% over the last year. The cost of funds remained stable due to a decrease in borrowing mix and selective retail deposits. The yield on assets was also stable, and the bank managed margins through appropriate selection and quality of loans. The NIM is expected to remain stable over a longer period, despite policy rate changes. Q: How does the bank plan to manage deposit growth given the recent rate cuts and liquidity changes? A: Srinivasan Vaidyanathan, CFO, stated that the bank is confident in its ability to grow deposits through distribution reach and customer engagement, rather than relying on rate differentiation. The bank aims to maintain a healthy deposit growth rate, leveraging its market share and customer relationships. Q: Can you provide clarity on the recent changes in senior management and their impact on the bank's strategy? A: Sashidhar Jagdishan, CEO, explained that Rahul Sukhla, head of Commercial and Rural Banking, is on sabbatical for personal reasons. The bank has reorganized its asset side under a new leadership to drive synergies, capture growth opportunities, and improve productivity. The reorganization is expected to enhance customer engagement and operational efficiency. Q: What is the outlook for the bank's ROA, considering the current rate cycle and growth projections? A: Srinivasan Vaidyanathan, CFO, mentioned that the bank's ROA has been stable around 1.9% post-merger. The bank aims to maintain this level, with potential fluctuations of 10 basis points due to market conditions. The long-term average ROA is expected to remain between 1.9% and 2.1%. Q: How does the bank plan to manage its CASA ratio and market share in the coming years? A: Srinivasan Vaidyanathan, CFO, stated that the bank aims to gain market share in both CASA and time deposits. The bank focuses on customer relationships and wallet share rather than targeting specific ratios. The CASA ratio is expected to improve as policy rates stabilize and disposable incomes increase. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Reuters
03-04-2025
- Business
- Reuters
India's HDFC Bank says growth in quarterly deposits outpaces loans
April 3 (Reuters) - HDFC Bank ( opens new tab, India's biggest private lender by assets, said on Thursday its growth in deposits outpaced that of loans in the three months to March 31, compared with the preceding quarter. Deposits rose 5.9% to 27.15 trillion rupees ($318.5 billion), the Mumbai-based bank said, higher than the 2.5% rise in the October-December quarter. Its low-cost current and savings account deposits rose 8.2%. Gross advances, or loans sanctioned and disbursed, rose 4% to 26.44 trillion rupees, faster than the 0.9% sequential growth in the previous quarter. HDFC Bank merged with its parent HDFC in July 2023, adding a large pool of loans to its portfolio but a much smaller volume of deposits. That has put the lender under pressure to either raise more deposits or scale back loan growth. Overall loan growth for Indian banks moderated for an eighth straight month in February due to a drop in personal and credit card loans following tighter rules by the Reserve Bank of India. In the March quarter, HDFC Bank securitised 107 billion rupees of loans, it said. The bank aims to grow its loan book in line with the industry in 2025-26, while pushing for faster deposit growth, Chief Financial Officer Srinivasan Vaidyanathan had said in January. ($1 = 85.2470 Indian rupees)
