HDFC Bank Management Guidance Tracker

Management expects full-year loan growth in the 17-18% range, consistent with historical doubling every 4-5 years.

Management indicated that the capacity built should enable retail deposit accretion of around INR 1 trillion per quarter, though Q1 was seasonally lower.

The bank plans to grow the construction finance portfolio, which will support top-line and margin recovery.

Management expects deposit growth to exceed loan growth by 300-400 basis points to reduce the LDR over time.

Management aims to reduce the loan-deposit ratio more quickly than previously planned, prioritizing profitable growth over volume.

Management outlined a three-year plan to normalize the loan-to-deposit ratio, with credit growth slower than system in FY25, matching system in FY26, and exceeding system in FY27.

Management reiterated its glide path: loan growth will be slower than the system in FY25, in line in FY26, and faster in FY27, as the credit-deposit ratio normalizes.

The bank expects to maintain deposit growth ahead of loan growth to further reduce the credit-deposit ratio, supported by strong liability franchise.

Management reiterated confidence in sustaining ROA between 1.9% and 2.1% on a merged basis.

Management reiterated its ability to maintain return on assets in the 1.9%-2.1% range, consistent with historical performance.

Margins are expected to improve as the bank substitutes high-cost debt with deposits and shifts loan mix towards retail.

The bank aims to reduce cost-to-income from ~40% to mid-30% over the medium term through digital efficiencies and margin improvement.

Management targets a lower cost-to-income ratio over the medium to long term, driven by efficiency gains and digitization.

Management expects net interest margins to stay within the current tight range, with potential improvement once LCR normalizes and regulatory clarity emerges.

Management aims to keep cost growth tight through productivity improvements, while continuing investments in branches, people, and technology.

Revised target from 1,500 to ~1,000 branches for FY24, with 570 branches in pipeline.

Management will start reporting penetration of savings accounts, credit cards, and consumer durable loans among new mortgage customers.

The bank aims to reduce its loan-to-deposit ratio from current ~110% to the high-80s over the next 2-3 years, faster than previously guided 4-5 years.

Scheduled borrowing maturities for the year are about INR 650 billion, with INR 250 billion already paid in Q1.