Private sector banks, SFBs see strong growth in credit, deposits in Q4

livemint.com:

₹1.7 trillion deposits in the fourth quarter, taking the total amount of deposits raised in FY24 to ₹3.5 trillion. Of the ₹1.7 trillion deposits mobilized in Q4, 77% were retail deposits, the bank clarified. The total deposit book stood at ₹23.8 trillion at the end of March.

HDFC Bank’s loan growth was, however, muted at 1.6% on a quarter-on-quarter basis. While retail and commercial and rural banking loan growth was a strong 4% sequentially, wholesale advances, excluding non-individual loans of the erstwhile HDFC Ltd, declined 2%. This is in line with the strategy of reducing the share of relatively low-yielding corporate loans to improve margins.

Among other private sector banks, Federal Bank saw a 5% sequential growth in deposits and advances each in January-March. RBL Bank saw a 12% sequential growth in deposits and 5% rise in credit book. Among small finance banks, Suryoday SFB saw strong business growth, with deposits expanding 20% and advances by 14% quarter on quarter.

AU SFB saw a 9% incremental growth in both loans and deposits. Equitas SFB saw 12% sequential growth in deposits and 5% growth in loan book. Credit to deposit ratio (CD) saw a marginal fall in Q4, but continued to remain above 80% for most banks.

CD ratio reflects the proportion of funds raised by banks through deposits, that have been utilized for lending. A high CD ratio signals liquidity and credit risks for banks. “Based on the preliminary result updates, it appears that the credit to deposit ratio for these banks has declined in Q4 on a sequential basis.