The cheapest source of funding for banks—current accounts and saving accounts—appears to be getting scarcer for private banks in India, according to quarterly financial updates filed by lenders.
HDFC Bank Ltd., for instance, saw its ratio of CASA deposits to overall deposits drop to 42.5% at end of Q1 FY24 from 45.8% a year earlier. The ratio declined sequentially as well from 44.4% as of March 31.
To be sure, HDFC Bank's CASA base stood at Rs 8.1 lakh crore in the first quarter, a growth of 10.7% from Rs 7.3 lakh crore a year earlier. Total deposits for the lender rose 19.2% year-on-year to Rs 19.13 lakh crore.
Similarly, other banks like IndusInd Bank Ltd., Yes Bank, RBL Bank Ltd., Federal Bank Ltd., and Bandhan Bank have all reported declines in CASA ratios in the first quarter of FY24.
The numbers reported so far are provisional.
The sharpest declines in CASA ratios have been reported by smaller private banks such as Bandhan Bank and Federal Bank. While Federal Bank's CASA ratio has declined by 5 percentage points to 31.8% in Q1 FY24 from 36.8% in Q1 FY23, Bandhan Bank's CASA ratio dropped from 43.2% a year ago to 36% in June.
Quarterly updates filed by most private banks also indicate that momentum in credit growth has continued to persist, despite elevated interest rates and an expanding base.
HDFC Bank Ltd.'s overall advances grew by 15.8% year-on-year in Q1 FY24, up from Rs 13.9 lakh crore in Q1 FY23 to Rs 16.1 lakh crore in Q1 FY24.
With HDFC Ltd.'s merger with HDFC Bank becoming effective starting July 1, the numbers for the combined entity also show that advances grew by 13.1% year-on-year from Rs 19.8 lakh crore in Q1 FY23, to Rs 22.4 lakh crore in Q1 FY24.
Other private banks have also reported strong credit growth in Q1 FY24, with IndusInd Bank's net advances registering a year-on-year growth of 21% to Rs 3 lakh crore against a 15% year-on-year growth in total deposits to Rs 3.5 lakh crore.
Except for IndusInd Bank, private banks have also seen growth in deposits match up with or exceed year-on-year growth in deposits.
Among large private banks in India, Kotak Mahindra Bank Ltd., ICICI Bank Ltd., and Axis Bank Ltd. are yet to file their quarterly updates with stock exchanges.
The benchmark Bank Nifty was down by 0.29% at 10:40 a.m. on Wednesday.
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