Q2 2025 HDFC Bank Ltd Earnings Call Transcript
Key Points
- HDFC Bank Ltd (HDB) reported a healthy deposit growth of around 15% year on year, with retail branches contributing 84% of total deposits.
- The bank's gross NPA remained stable at about 1.4%, with gross slippages improving to 1.2% compared to the previous year.
- Profit after tax grew by an adjusted rate of 17%, reflecting strong financial performance after accounting for bond gains and tax adjustments.
- The bank's fee income grew by 17% year on year, driven by strong growth in third-party and distribution products.
- HDFC Bank Ltd (HDB) is strategically positioning itself to capture future growth opportunities by accelerating the reduction of its loan-to-deposit ratio.
- Deposit rates remain elevated and sticky, posing a challenge in the current competitive environment.
- The bank's credit growth is expected to be slower than the system in FY25, potentially impacting its market position.
- There is uncertainty regarding the impact of RBI's draft circular on lending overlaps with group entities, which could affect HDB Financial's listing plans.
- The liquidity coverage ratio has increased to 128%, which may temporarily depress margins due to higher high-quality liquid assets.
- The bank faces challenges in pricing larger ticket-sized loans due to stubbornly low credit spreads, affecting its loan growth strategy.
Ladies and gentlemen, good day, and welcome to HDFC Bank Limited Q2 FY25 earnings conference call. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Srinivasan Vaidyanathan, Chief Financial Officer, HDFC Bank. Thank you, and over to you, sir.
Thank you, Neerav. Welcome to all the participants. I appreciate dialing in today. We'll start with -- we have our CEO and Managing Director, Mr. Sashi Jagdishan with us. We'll start with his opening remarks and then get back to you all. Sashi, over to you.
Thank you, Srini, and thank you, friends. Let me first wish you a belated Dussehra festivities and also wish you in advance the Diwali festivities that's going to come in next week itself.
Let me start with some of the macroenvironment which we are witnessing. Liquidity has been gradually improving over the last couple of months, so that's a
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