Combined Loan Book Of HDFC Bank-HDFC Rises 13 Per Cent, Deposits Up 16 Per Cent In Q1

HDFC Bank's advances aggregated to approximately Rs 16,155 billion for the quarter ended June 30, up nearly 15.8 per cent from Rs 13,951 billion a year ago

The $40-billion merger between HDFC Bank and HDFC marks the largest deal in the history of Indian corporate.

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The combined loan book of HDFC Bank and HDFC Ltd expanded by 13.1 per cent year-on-year (YoY) to Rs 22.45 trillion at the end of June 30, 2023 (Q1FY24). The merged entity’s deposits grew by 16.2 per cent YoY at Rs 20.63 trillion at the end of the first quarter. The merged entity’s advances rose sequentially by 0.7 per cent to Rs 22.30 trillion as of March 31, 2023. However, the pace of deposit mobilisation was higher at 1.2 per cent over Rs 20.39 trillion as of March 31, 2023.

The bank informed the exchanges on Wednesday that its advances aggregated to approximately Rs 16,155 billion for the quarter ended June 30, up nearly 15.8 per cent from Rs 13,951 billion a year ago. The merged entity's average Liquidity Coverage Ratio (LCR) was around 120 per cent for the quarter ended June 30, 2023.

HDFC Bank, India’s largest private sector lender, gave out details about the performance for the merged entity on a proforma basis. Housing Development Finance Corporation (HDFC) merged with and into HDFC Bank on July 1. The bank informed the BSE that the housing finance firm closed its books of accounts a few days prior to the quarter ended June 30, 2023 to facilitate the merging of its financials with those of the bank. Accordingly, some of the numbers may not be directly comparable with those of the previous year.

Retail deposits increased by 21.5 per cent YoY and 2.5 per cent over March 2023 on a standalone basis. The wholesale deposit portfolio grew by around 9.0 per cent YoY and 2.5 per cent over March 2023. The share of low-cost deposits, current account and savings account (CASA), declined to around 42.5 per cent as of June 30, 2023, from 45.8 per cent a year ago. Share of CASA in total deposits also declined from 44.4 per cent as of March 2023.

The $40-billion merger between HDFC Bank and HDFC marks the largest deal in the history of Indian corporate. With this merger, HDFC Bank is poised to become the world's fourth most valuable lender and significantly narrow the asset size gap with state-owned SBI, positioning itself as the second-largest bank in India.

As per the news agency, the merger was the result of regulatory changes that restricted the advantages of HDFC operating as a non-bank lending entity.