HDFC Bank Ltd (NYSE:HDB) Q2 2025 Earnings Conference Call October 19, 2024 8:00 AM ET

Company Participants

Srinivasan Vaidyanathan - CFO
Sashidhar Jagdishan - CEO, Managing Director & Executive Director

Conference Call Participants

Mahrukh Adajania - Nuvama Wealth Management
Kunal Shah - Citi
Gaurav Singhal - Aspex Management
Pranav Gundlapalle - Sanford C Bernstein
Rahul Jain - Goldman Sachs
Rikin Shah - IIFL Securities
Abhijith V. - Axis Mutual Fund
M. B. Mahesh - Kotak Securities
Saurabh Kumar - JPMorgan
Abhishek Murarka - HSBC
Prakhar Sharma - Jefferies
Chintan Joshi - Autonomous
Manish Shukla - Axis Capital

Operator

Ladies and gentlemen, good day, and welcome to HDFC Bank Limited Q2 FY25 Earnings Conference Call. As a reminder all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. [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.

Srinivasan Vaidyanathan

Thank you, Nirav. Welcome to all the participants. I appreciate dialing in today. We'll start -- 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.

Sashidhar Jagdishan

Thank you, Srini, and thank you, friends. Let me first wish you a belated Dashera festivities and also wish you in advance Diwali festivities that's going to come in next week itself.

Let me start with some of the macro environment, which we are witnessing. Liquidity has been gradually improving over the last couple of months. So that's a bit of a good news. However, the deposit rates continue to be elevated and sticky. Probably the credit growth still outpaces deposit growth in the system, and that's maybe the reason why it continues to be sticky. As we have witnessed in the previous high interest rate cycles, customer preferences continue to be towards time deposits, probably to lock-in at higher rates.

Despite intense competition -- competitive environment, deposit growth has been very healthy. On an average basis, we have grown around 15% year-on-year. Retail branch continues to contribute around 80% to 85%, in fact, to be precise, 84% of the total deposits. Let me talk about the advances under management. We have mentioned in earlier public forums and calls that we will bring down the CD ratio faster than what we had anticipated in the past. Let me spell out some of the bright spots of our credit growth. FY25, we would probably grow slower than the system, FY26, we may be at or around the system growth rate, FY27, we should be faster than the system growth rate.