At a time when some private sector lenders are seeing an erosion in deposits after the Yes Bank episode, lenders such as HDFC Bank and Kotak Mahindra Bank have bucked the trend.
HDFC Bank has said it has seen a 24% year-on-year growth in deposits as on March 31. Deposits increased to ₹11.46 lakh crore from the ₹9.23 lakh crore a year ago and from ₹10.67 lakh crore at the end of December 2019.
The current and savings account deposit ratio of the bank, which are low-cost deposits, was around 42% of the total deposits as on March 31 compared with 42.4% a year ago and 39.5 % as of December 31, 2019.
Kotak Mahindra Bank has said its total deposits, excluding certificate of deposits, grew by 19.6% year-on- year to ₹2.58 lakh crore as on March 31. Deposit growth was up 11.7% sequentially, going up from ₹2.31 lakh crore in December 31, 2019.
The ratio of low cost deposits also showed improvement, rising to 56.2% as on March 31 from the 52.5% a year ago and 53.7% a quarter ago.
On the advances, HDFC Bank’s advances grew by 21% year-on-year to ₹9.93 lakh crore as on March 31, 2020. Kotak Mahindra Bank’s net advances increased 6.7% year-on-year and 1.3% sequentially to ₹2.19 lakh crore .
After Yes Bank was put under moratorium, private sector lenders like IndusInd Bank and RBL Bank saw their deposits base eroding as some State government agencies pulled out deposits.
RBL Bank, which saw deposit base eroding 8% in last quarter, expects deposit traction to grow at a healthy pace once restrictions due to the economic lockdown are lifted. While commenting that the bank’s plan to reach 400 branches milestone was not met due to lockdown, but said branch expansion plans for FY21 is expected to continue as planned. After adding 62 branches in FY20, RBL Bank ended the year with 386 branches.
IndusInd Bank which also experienced erosion in deposits saw its rating outlook revised to negative. India Ratings while affirming the bank’s long term issuer ratings at AA+ but revised outlook to negative from stable.
