HDFC Bank has completed its first full financial year since its merger with HDFC on July 1, 2023. Managing Director and CEO Sashidhar Jagdishan called FY25 a year of consolidation and progress, highlighting the bank’s robust performance across key financial and operational areas.
HDFC Bank posted a 10.7 per cent rise in net profit to Rs 67,347.4 crore for FY25. Net interest income grew by 13 per cent to Rs 1,22,670.1 crore. The bank’s net interest margin stood at 3.48 per cent.
Its balance sheet grew by over 8 per cent to Rs 39,10,199 crore. Gross non-performing assets (NPAs) were maintained at a low 1.33 per cent of gross advances. Advances grew 5.4 per cent to Rs 26,19,609 crore, while deposits saw a strong 14.1 per cent rise to Rs 27,14,715 crore.
Loan growth slowed to strengthen balance sheet metrics:Jagdishan
In FY25, the bank’s deposits grew 2.5 times faster than its loans. This helped bring down the credit-to-deposit ratio to 96 per cent, from around 110 per cent at the time of the merger.
Jagdishan said that the bank has deliberately slowed down loan growth to improve its credit-deposit ratio. “Our deposits grew 2.5 times faster than loans. We took affirmative steps to bring down the credit-to-deposit ratio and reduce the percentage of high-cost borrowings,” he noted. However, it now aims to grow its loan book in line with the banking system in FY26 and beat the system growth in FY27.
“We are focused on taking singles in the year that concluded and are now positioned to go for the boundaries,” Jagdishan said, using a cricketing analogy to describe the bank’s cautious yet strategic approach last year.
Jagdishan highlighted that maintaining low levels of bad loans remains a core strength of HDFC Bank. He said the bank has weathered multiple business cycles while keeping its asset quality strong.
HDFC Bank trims high-cost borrowings to 14 per cent
Jagdishan also highlights that the successful integration of HDFC has given the bank access to a strong portfolio of subsidiaries in life and general insurance, mutual funds, and brokerage.
“The mortgage business, which was a key part of the merger, is now the largest in the country,” Jagdishan said. He added that the business has led to increased cross-selling opportunities across the group.
Notably, over 95 per cent of new home loan customers are opening CASA accounts with the bank, and more than half of them are also choosing additional products. This shift is helping the bank become the primary financial institution for many customers.
HDFC Bank eyes industry-level growth in FY26, targets out performance in FY27
Looking ahead, HDFC Bank aims to grow in line with the industry in FY26 and outperform the market in FY27.
“We are now positioned for faster growth. The reset in loan growth and the consolidation of the merger has resulted in a much stronger bank,” Jagdishan said.
The bank added more than 700 branches during FY25 and plans to continue expanding its presence across India. The CEO said that the merger synergies, strong deposit mobilisation, and an improved credit-to-deposit ratio will support future growth.
HDFC Bank is scheduled to announce its financial results for the first quarter of FY26 on Saturday, July 19, at 6 PM.