HDFC Bank Limited

Ladies and gentlemen, good day and welcome to HDFC Bank Limited Q3 FI26 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. And now at the conference, Over to Mr. Srinivasan Vaidyanathan, Chief Financial Officer, HDFC Bank. Thank you. And over to Mr. Vaidyanathan.

Okay. Thank you. Thank you, Nirav. Good evening and a warm welcome to all the participants. At the outset, I know that it's 6.15, 15 minutes behind schedule. We had another meeting. We had to conclude and come. Apologies for that. But we'll take as many questions as possible and extend where required. With that, without much ado, we straight go into the opening remarks by our CEO and MD, and then we'll end. We have our DMD, Kaizad, any comments we'll take, and we'll go straight to Q&A after that. Sashi, over to you first, and then we'll take it from there.

Good evening, friends. Thank you very much for joining in on a Saturday evening. I know it's rather late, but always appreciate your attention. being here on a Saturday evening. I think we've just sort of declared the results, and you probably would have seen the financial numbers. We're reasonably sanguine and happy about the outcome that has happened. It's in line with our expectations. Looking back, I think the credit growth buildup has been extremely encouraging. We set our sights on a very balanced credit across customer segments. The easing rate cycle and the benign credit has provided catalyst for the credit growth. The CRR release enabled credit deployment slightly ahead of our expectations. As regards funding, the funding through deposits, we continue to maintain rate discipline, and that has been extremely key. Core individual retail customer segments were seen to be quite strong. For both current and savings, Having focused on granular segments have given us encouraging outcomes, and more of this, I'm sure Srini will sort of give the numbers. We did, however, fall short of our strong ambitions, but we are confident that continued focus on our strengths will bring the expected outcomes. On the growth, profitable growth, as mentioned earlier, cost of funds has moved down, reflecting the the tailwind effects. CASA growth has been positive. Costs have been under control as productivity improvements have brought in efficiencies. Credit, which has always been our USP, remains best in class, allowing us to deliver stable returns as we pivot to the next stage of growth. Looking ahead, the regulator and government continues to be focused on supporting economic and credit growth. At the same time, optimally managing external factors. During the quarter, availability of liquidity was impacted due to some of these. We saw enhanced activity in open market operations and FX swaps to combat some of these challenges. India has demonstrated stable political conditions and consistent policy regime. This has led to being one of the fastest growing major economies in the world. Growth with subdued inflation management was at the top of the order, and hence we believe and we are very optimistic about outpacing loan growth in the coming year in FI27, as we had sort of mentioned to you all along for the last 18 months. Liquidity and benign credit costs provides us a lot of runway to grow. Overall, liquidity in the country is expected to stabilize post-trade deals. The foundations are in place to build deposits to fund loan growth. We continue to expand our customer base. We are now intensifying customer engagement primarily and largely focused on granular mobilizations. We are aligning pricing with segmented approach, and we shall see that in the coming quarters as well. There's been a lot of talk on the CD ratio. We did sort of drop our CD ratio to significantly since the merger to March 25. As you know, the kind of indicator is not necessarily on the radar from a regulatory perspective. Having said that, we believe that our glide path to lowering of CD ratio will continue. It's an important focus for sustainable profitability, I completely acknowledge. The cycle, the easing cycle with credit growth focus in the country surely needs our participation. So the speed of CD ratio movement depends on how we are able to provide funding in the system at rational rates. But having said that, we're very confident that whatever we seem to have committed in the last two years, I think by March, I think we should see, and by March 27, 26, and 27, we should sort of see achieve all the most of the committed matrices that we have laid out for. I would like to say that under the current scenario, we don't think that we shall be constrained by the CD ratio. To reiterate, we're confident that it will be on a downward glide path. I would also like to reiterate that we shall meet the glide path that we had indicated earlier in terms of the growth, our top-line growth, which is in line with the system this financial year. and faster than the system in the next financial year. In summary, I have a great appreciation for our customers for partnering with us, and I have the greatest gratitude to all our 200,000 staff who are pillars making this place work successfully. We're confident of the path forward that we have set for ourselves. Thank you very much, and we have all of us here, Kaizad, Srini, and the team here, to take on any questions that you may have. Thank you.