HDFC Bank reports stable NIM, focuses on strategic growth

HDFC Bank (BSE: HDFCBANK) reported stable Net Interest Margins (NIM) operating within a narrow band of 3.4% to 3.5% over the last year. The bank emphasized its focus on carefully managing deposit costs and asset yields. While the bank noted a moderation in the Credit Deposit Ratio from 110% at the time of merger to 96%, it expects a gradual decline supporting loan growth. The bank remains optimistic about India's economic outlook, driven by recent rate cuts and improved liquidity. HDFC Bank reported customer preference for time deposits driving growth of INR0.8 trillion in the recent quarter, with stable cost of funds at 4.9%. The bank highlighted its shift from being just a lending institution to a relationship bank, emphasizing that it continues to meet its priority sector lending targets and that it is making strategic investments for long-term growth, with a continued focus on technology. HDFC Bank is targeting growth at market rate, and will not be cutting the credit ladder to pickup volumes.