HDFC Bank has completed its first full financial year since the merger with HDFC. The merger significantly increased the size of the bank’s balance sheet but also added a substantial amount of debt that needed to be pared down.
“With the merger of differently regulated entities, the liability side brought in a considerable amount of debt that had to be reduced,” said Atanu Chakraborty, Chairman of HDFC Bank, in his message to shareholders in the FY25 integrated annual report.
HDFC Bank emerges as full-fledged financial conglomerate post merger
He confirmed that, following the merger, the HDFC Bank Group is now a financial conglomerate in the true sense of the term. “It now stands strengthened, much bigger in scale, broadened in capability and more unified in purpose.”
It now has a sizable presence in insurance (both life and general), mutual funds, brokerage and alternative investments, the report highlights. Chakraborty adds that Operational integration is mostly complete, and expansion in home loans and cross-selling of group products are contributing to growth.
Loan-to-deposit ratio cut to build a more stable balance sheet: Chakraborty
Chakraborty highlighted that throughout most of FY25, the Reserve Bank of India maintained a monetary policy stance of “Withdrawal of Accommodation”, which limited credit growth across the banking system. The tight liquidity made it difficult for banks to expand their loan books.
In response, HDFC Bank altered its funding strategy. The bank worked to increase the share of deposits in its funding mix and bring down the loan-to-deposit ratio, shifting towards a more stable and regulatory-compliant balance sheet.
PAT rises 10.7 per cent despite modest loan expansion
This proactive approach resulted in a 14.1 per cent growth in deposits during the financial year, while advances grew more modestly at 5.4 per cent. The move reflected the bank’s deliberate strategy to stabilise funding sources and comply with regulatory norms, rather than aggressively expand credit.
Despite the slower loan growth, the bank’s Profit After Tax rose by 10.7 per cent to Rs 67,347.4 crore. The Net Interest Margin remained healthy at 3.48 per cent, and Gross Non-Performing Assets were just 1.33 per cent, underlining the bank’s strong asset quality.
Board recommends Rs 22 dividend per share for FY25
The board of directors has recommended a dividend of Rs 22 per equity share for FY25, subject to shareholder approval in the upcoming annual general meeting. Chakraborty also welcomed Santhosh Keshavan as an Independent Director.
HDFC Bank is scheduled to announce its financial results for the first quarter of FY26 on Saturday, July 19, at 6 PM.