HDFC Bank Limited

Ladies and gentlemen, good day and welcome to HDFC Bank Limited Q3 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. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. 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 Mr. Vaidyanathan.

Okay, thank you Nirav. Good evening to all. Thanks for participating and coming in today. I will kick it off. I will request our CEO, Mr. Sashi Jagadishan to get started and give some opening remarks. Then we will go straight to any questions that you all have. We can go into that. Sashi, over to you, please.

Thank you, Srini, and thank you all for joining on this call on a Wednesday evening. We just declared our results, and obviously, as you probably know much better than all of us put together, we are in the midst of a very challenging macroenvironment. with tight liquidity conditions, signs of moderating urban demand, a tepid private capital expenditure programs, volatility and depreciation of the Indian rupee, capital outflows from equity and debt markets due to uncertainty around the new U.S. administration. However, we also see some drivers of growth or some positive signs as well. We are seeing some amount of rural demand picking up. The government spending is picking up after a slow momentum in the hedge fund the first half of the year. We see continued strength in services exports and a gradual moderation in inflation. Coming to the bank, we seem to be progressing well in our journey to normalize our credit deposit ratio. with the deposit growth outspacing our loan growth. We've seen robust growth in our average deposits at about 15%, which continue to gain market share. And our AU advances growth of 8% year-on-year basis. We've delivered a strong deposit growth despite the challenging macro environment. As probably you would know, on an average basis, I think we saw a very near neutral liquidity in quarter three with a peak negative of around the 2 to 2.5 trillion. NIMS have remained reasonably range bound and stable despite the headwinds from tight liquidity leading to tight pricing environment. We continue to add distribution. I think over a year-on-year period, on a 12-month period, we've added about over 1,000 odd branches But we've been able to maintain a very tight leash on the cost. Our cost growth has grown 7% year on year, which means that we have gained some amount of productivity gains there. But the most important part, which is something that we've always maintained, is our credit to USP. All our credit parameters, be it the slippages, be it the gross NPA, be it the credit costs, X of some of the cyclical patterns in the agri sector have been reasonably resilient and stable, which is something which sort of shows the strength of the institution, not just now, but for a long time that we have been in this business. Going into the future, we are robustly positioned. We have been growing in a very balanced manner in line with what we had committed to ourselves and to the world at large in terms of the glide path on the CD ratio, all the kind of growth levels that we are anticipating. As we speak, we have sufficient liquidity. We continue to grow our deposits faster than the system. we have sufficient capital, allowing us to be very comfortable to grow or capture market shares in the loans when macro turns came. I know all of you would have a lot more questions, so let me pause out here and let us take questions from all of you. Thank you.