Banks Q2 Update: Deposits Grow Despite Moderating CASA Ratio
AU Small Finance Bank and HDFC Bank witnessed the highest deposit growth year-on-year at 30% and 29.9%, respectively.
Indian banks' deposits grew in the second quarter despite falling CASA ratios, provisional data released so far by some banks showed.
This trend was seen across HDFC Bank Ltd., Federal Bank Ltd., IndusInd Bank Ltd., Yes Bank, CSB Bank Ltd., South Indian Bank Ltd., and AU Small Finance Bank Ltd., according to the overview of their released Q2 provisional figures.
Of these, AU Small Finance Bank and HDFC Bank witnessed the highest deposit growth year-on-year at 30% and 29.9%, respectively. For HDFC Bank, the growth was also after the mega-merger with Housing Development Finance Corp.
The Federal Bank's deposits rose 23% year-on-year to Rs 2,32,871 crore, supported by a year-on-year uptick in certificates of deposit and interbank deposits at 137% and 115%, respectively.
Deposit growth continues despite the CASA ratio falling.
For AU Small Finance Bank, the CASA ratio fell 840 basis points year-on-year to 33.9% as of Sept. 30.
This was followed by HDFC Bank's CASA ratio at 37.6%, declining 780 basis points; and Federal Bank and CSB Bank's fell 520 bps and 510 bps, respectively.
The second-quarter overview also showed strong growth in advances by private banks. HDFC Bank led with advances rising 57.7% year-on-year to Rs 23,54,500 crore, followed by CSB Bank's advances growing at 27.22% and IndusInd Bank's at 21%.
BQ Prime previously reported that the banks' net interest margins also showed signs of slowing down after Q1 FY24 results. In line with this, the trend of margin compression is expected to continue as the cost of deposits rises, according to analysts.
