Private banks to report strong deposit growth for March quarter
Indian private lenders are expected to post robust deposit growth in the March quarter, according to initial figures announced by three banks.
On Monday, HDFC Bank, IndusInd Bank and Federal Bank presented key business performance indicators to exchanges, including loan and deposit growth. HDFC Bank, India’s largest private sector lender, said its deposit base was around ??13 350 billion at March 31, an increase of about 16.3% compared to the previous year.
The Federal Bank declared provisional total deposits of ??1.72 trillion as of March 31, an increase of 13% from the previous year. IndusInd Bank also recorded strong deposit growth of 27% at ??2.56 trillion at the end of the March quarter of fiscal 21.
As banks try to grow their deposit base, retail price inflation has eroded saver returns. However, this did not deter investors from placing their money in bank deposits. As of March 12, bank deposits amounted to ??149,550 billion, up 12% from the previous year.
“Most banks are focusing on collecting deposits (especially checking accounts and savings accounts and retail term deposits) to increase their liability deductibles and reduce reliance on bulk deposits,” said Motilal Oswal in a note on March 31.
All three banks reported strong growth in deposits in current and savings accounts (Casa) during the March quarter. While HDFC Bank’s low-cost Casa deposits increased 27% year-over-year for ??$ 6.15 trillion in fiscal fourth quarter, Federal Bank Casa deposits rose 26% to ??58,381 crores.
Two of the three banks also exceeded industry lending growth levels in the March quarter. While HDFC Bank loans increased 13.9% from the previous year, the Federal Bank reported loan growth of 9%. However, IndusInd Bank’s net advances increased by 3% over the same period and were lower than the average growth of 6-6.5% of the banking system.
Never miss a story! Stay connected and informed with Mint. Download our app now !!