HDFC Financial institution eyes market-aligned mortgage progress in FY26, targets pre-merger CD ratio by FY27: CFO, ETCFO
India’s largest private-sector lender, HDFC Financial institution, is working in direction of a return to pre-merger monetary parameters, with a renewed give attention to deposit-led progress, secure margins, and calibrated capital deployment.
Talking on the financial institution’s This autumn FY25 earnings name, Chief Monetary Officer Srinivasan Vaidyanathan outlined the financial institution’s medium-term technique, reaffirming its plan to deliver the Credit score-to-Deposit (CD) ratio again to the pre-merger vary of 85–90% by FY27. The ratio at present stands at 96.5%, down from 110% instantly after the merger with HDFC Ltd.
We accelerated the correction within the CD ratio throughout a interval when industry-wide mortgage progress was slowing. It was an applicable time to realign our stability sheetSrinivasan Vaidyanathan, CFO, HDFC Financial institution
Mortgage e book to develop consistent with market in FY26After a yr of prioritising deposit mobilisation, HDFC Financial institution plans to broaden its mortgage e book in line with the broader market in FY26, with an intention to outpace the {industry} by FY27.
“In FY26, we intend to develop on the market charge. From FY27, the target is to begin gaining market share on the mortgage aspect once more,” Vaidyanathan stated.
The financial institution added Rs 3.1 lakh crore in deposits in the course of the yr, translating into 15.8% year-on-year progress. This was supported by a wider distribution footprint and stronger buyer acquisition, significantly in semi-urban and rural areas.
Margins regular, securitisation to stay opportunistic
Internet curiosity margins (NIM) have remained secure within the post-merger section, ranging between 3.4% and three.6% on complete belongings. The financial institution expects this pattern to proceed within the close to time period, aided by decrease borrowing prices and operational effectivity.
On an annual foundation, we anticipate stability in margins with a marginal upward biasThe CFO famous.
On securitisation, Vaidyanathan stated the financial institution would proceed to faucet the route based mostly on market dynamics however just isn’t working in direction of any preset goal. “Over the following three to 5 years, we intention to fund progress in a extra environment friendly method, which can embrace securitisation relying on market urge for food,” he stated. Company lending cautious amid pricing stressHDFC Financial institution’s company mortgage e book has seen muted progress amid what the financial institution described as irrational pricing by rivals. Vaidyanathan stated a number of market offers have been priced under the marginal price of funds, significantly by some public sector lenders.
“We now have stayed away from these transactions. Nevertheless, we proceed to serve corporates by way of different merchandise like commerce finance, overseas change, and money administration,” he stated. The financial institution will look to re-enter extra actively as soon as pricing turns into sustainable.
In distinction, the lender is stepping up efforts within the small and medium enterprise (SME) section, the place it sees important potential. The financial institution has now prolonged its attain to over 700 districts, positioning itself to seize extra SME lending alternatives.
CASA outlook regular regardless of charge lower
Addressing considerations over a latest discount within the financial savings account rate of interest, Vaidyanathan stated the transfer mirrored coverage charge cuts and was aimed toward making certain balanced transmission throughout each side of the stability sheet.
Regardless of the discount, we stay competitively positioned among the many high 5 banks on financial savings charges. Our CASA progress technique is anchored in distribution growth, buyer acquisition, and digital engagementThe CFO stated.
Nicely-diversified mortgage combine, retail push continuesHDFC Financial institution’s mortgage portfolio stays well-diversified, with mortgages forming 30% of the e book, retail (non-mortgage) loans round 20%, industrial and rural banking almost one-third, and wholesale/company lending accounting for 16–17%.
The financial institution expects retail and semi-urban demand to drive progress going ahead. “Retail credit score penetration in India continues to be low, providing long-term progress alternatives,” Vaidyanathan stated.
