HDFC Bank CEO Outlines Strategy: Slower Credit Growth, Focus on Technology Investments

HDFC Bank CEO plans to grow credit slower than deposits, focus on technology investments | India Business News - Times of India

Mumbai: HDFC Bank MD & CEO Sashidhar Jagdishan has said that the bank will grow its advances a little slower than the deposits and shun loan growth that does not meet the bank's risk-adjusted profitability thresholds. In a letter to shareholders, Jagdishan said the bank aims to reduce the credit-to-deposit ratio to pre-merger levels and improve liquidity buffers while also paying off some previous borrowings of HDFC.After the merger, the credit-to-deposit ratio increased to 112% last year. This was lowered to 106% in the Dec quarter and further to 106% in March 2024. Analysts anticipate that it would have decreased further to below 100%. On proposed investments in technology, Jagdishan said, "Our ongoing investments in technology include a focus on our 'Core Banking' platform, digital interfaces, advanced analytics, AI/ML, and cloud adoption... We are working on the next-generation mobile app and net banking platforms, driven by customer feedback and industry trends." Jagdishan said the merger has presented the bank with a massive opportunity, which it was working to seize through the mortgage business.

HDFC Bank CEO plans to grow credit slower than deposits, focus on technology investments

Mumbai: HDFC Bank MD & CEO Sashidhar Jagdishan has said that the bank will grow its advances a little slower than the deposits and shun loan growth that does not meet the bank's risk-adjusted profitability thresholds. In a letter to shareholders, Jagdishan said the bank aims to reduce the credit-to-deposit ratio to pre-merger levels and improve liquidity buffers while also paying off some previous borrowings of HDFC.After the merger, the credit-to-deposit ratio increased to 112% last year. This was lowered to 106% in the Dec quarter and further to 106% in March 2024. Analysts anticipate that it would have decreased further to below 100%. On proposed investments in technology, Jagdishan said, "Our ongoing investments in technology include a focus on our 'Core Banking' platform, digital interfaces, advanced analytics, AI/ML, and cloud adoption... We are working on the next-generation mobile app and net banking platforms, driven by customer feedback and industry trends." Jagdishan said the merger has presented the bank with a massive opportunity, which it was working to seize through the mortgage business.

HDFC Bank to grow advances slower than deposits - Times of India

Mumbai: HDFC Bank MD & CEO Sashidhar Jagdishan has said that the bank will grow its advances a little slower than the deposits and shun loan growth that does not meet the bank's risk-adjusted profitability thresholds. In his letter to shareholders, Jagdishan said the bank aims to reduce the credit to deposit ratio to pre-merger levels and improve liquidity buffers while also paying off some of the previous borrowings of HDFC.After the merger, the credit-to-deposit ratio increased to 112% last year. This was lowered to 106% in the December quarter and further to 106% in March 2024. Analysts anticipate that it would have decreased further to below 100%. On the proposed investments in technology Jagdishan said "Our ongoing investments in technology include a focus on our 'Core Banking' platform, digital interfaces, advanced analytics, AI/ML, and cloud adoption... We are actively working on the next-generation mobile app and net banking platforms, driven by customer feedback and industry trends." Jagdishan said the merger has presented the bank with a massive opportunity, which it was working to seize through the mortgage business. "We will now focus our energies on leveraging the cross-sell opportunities of both the Bank and the Group's products to these customers, providing seamless technology-enabled customer journeys and a compelling value proposition," he said. He said that the bank has already made much progress on this front. "Pre-merger approximately 30 to 35% of incremental home loan disbursals were to customers with an HDFC Bank savings account. This has now touched approximately 85% of incremental disbursals in a space of just nine months," he said. Explaining the backdrop in which the bank has decided to slow down credit growth, Jagdishan said that overall credit growth has been in double digits since April 2022. Higher demand for consumer durables and greater retail spends have boosted retail credit growth. "Retail loans have increased at a CAGR of 19% over the last five years, outpacing the growth in nominal GDP. During this period, the RBI has issued advisory to banks on strengthening the acquisition, monitoring, and collection process as the unsecured loan growth has outpaced the overall loan growth," he said.