HDFC Bank, India’s largest private sector lender by market capitalisation, has reported a robust 20 per cent loan growth in the quarter ended December 2019 compared to a year earlier led by a big consumer loan push in the festive season as the bank took advantage of its strength in retail banking and wide network.
In a regulatory pre-results disclosure to stock exchanges the bank said its total advances rose 20 per cent to Rs 9.34 lakh crore in the quarter ended December 2019 from Rs 7.81 lakh crore in the quarter ended December 2018. The bank did not say where the growth came from. But analysts said the special retail loan drives the bank undertook in the third quarter of the fiscal and gains in market share the bank made in the corporate loan segment are reflecting in the numbers.
“HDFC Bank is significantly gaining market share both in retail as well as corporate segments. They have had a very good festive season which is reflected in such strong growth numbers. Strong investments in distribution franchise — common service centres (CSCs), VRMs (virtual relationship managers), POS (post of sale) terminals etc., all of which are showing results. Note that nearly 40-50 per cent of the incremental business in unsecured loans comes through the digital banking route which is also helping them to post very good numbers,” said Suresh Ganapathy, research analyst at Macquarie Capital Securities.
On September 30, HDFC BankNSE 0.89 % launched Festive Treats to reach retail customers with over a hundred offers online and instore on credit cards, easy EMIs and special loans. The bank tied up with over a thousand retail brands offering discounts, cash backs and reward points on a wide range of products, online or offline.
This big retail push helped HDFC Bank grow its loan book at 20 per cent when system growth is a mere 7 per cent. Ganapathy, for example, estimates that the bank helped sell Rs 12 crore worth IPhones in the recent festive season in Nashik alone.
Besides the loan growth, the bank also saw a strong growth in deposits. The bank’s deposit aggregated to approximately Rs 10.67 lakh crore as of December 2019, a growth of around 25 per cent from Rs 8.52 lakh crore a year earlier. The bank’s ratio of low cost current and saving account (CASA) stood at around 39.5 per cent as of December 2019, compared to 40.7 per cent as of December 31, 2018 and 39.3 per cent as of September 2019.