HDFC Bank’s shares declined 1.09 per cent or ₹19.10 to trade at ₹1,730.10 on the National Stock Exchange in early trading Monday, as India’s largest private sector lender reported its December quarter business update showing improved deposit growth while its loan-to-deposit ratio fell below 100 per cent for the first time since its merger with HDFC Ltd.

Leading brokerages maintained largely positive views on the bank, with Morgan Stanley keeping an overweight rating with a target price of ₹1,975, and Bernstein maintaining an outperform rating with a target of ₹2,300. Jefferies recommended a buy with a ₹2,120 target, while Nomura stayed neutral with a ₹1,780 target. Analysts noted that while loan growth was softer than expected, deposit growth remained strong, and margin progression would be a key focus area in the upcoming quarterly results.

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The bank reported a 7.6 per cent year-on-year growth in average advances under management to ₹26,276 billion for the December 2024 quarter. The loan-to-deposit ratio improved to 99.2 per cent at the end of December, down from 100.76 per cent in the September quarter and 111.53 per cent in the year-ago period, reflecting stronger deposit mobilisation and strategic loan securitisation.

In retail lending, the bank achieved 10 per cent year-on-year growth, while commercial and rural banking loans expanded by 11.5 per cent. However, corporate and wholesale loans decreased by 10.3 per cent compared to December 2023. The bank securitised loans worth ₹216 billion during the quarter as part of its strategic initiatives, bringing the total securitisation for the financial year to ₹463 billion.

Deposits showed robust growth with average deposits increasing 15.9 per cent year-on-year to ₹24,527 billion. Time deposits grew significantly by 21.5 per cent to ₹16,351 billion, while CASA (Current Account Savings Account) deposits recorded a modest 6 per cent growth to ₹8,176 billion.

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In a separate development, the Reserve Bank of India granted approval for HDFC Bank group entities to maintain aggregate holdings of up to 9.5 per cent in Kotak Mahindra Bank, AU Small Finance Bank, and Capital Small Finance Bank until January 2, 2026. The bank clarified that while it doesn’t plan direct investments, the approval was sought as its group entities’ combined holdings might exceed the standard 5 per cent limit.