HDFC Bank has completed its first full financial year since merging with Housing Development Finance Corporation (HDFC). The merger expanded the bank's balance sheet, but it also incurred a large amount of debt. Chairman Atanu Chakraborty observed the FY25 integrated annual report, which indicated that the merger entailed handling the liabilities of entities that are differently regulated, hence the need to decrease supplementary debt.
Due to the merger, the HDFC Bank has been operating as a complete financial conglomerate. It operates in insurance (both life and general), mutual funds, brokerage, and alternative investments. Integration in operations is nearly full, and the bank has begun expanding its home loans business and cross-selling products across group entities.
In FY25, HDFC Bank implemented an approach to increase funding stability. Chakraborty revealed that the RBI's monetary policy specifically the Withdrawal of Accommodation, affected the growth of credit in the industry. As a measure of response, the bank put more emphasis on deposit growth and reduced its loan-to-deposit ratio. The strategy was in place to ensure that they could meet regulatory standards and construct a stronger balance sheet.
The change led to a 14.1% increase in deposits, although on the loan front, it was only a proportionate increase of 5.4%. This shift corresponded with the bank's efforts to stabilize its financial situation and not exceed the issuance of credit.
Despite this improvement in lending growth, Profit After Tax (PAT) grew by 10.7 percent to Rs 67,347.4 crore in FY25. Asset quality was maintained, as evidenced by a strong net interest margin of 3.48% and a low gross non-performing assets ratio of 1.33%.
The board, in appreciation of the performance, has recommended a dividend of Rs 22 per equity share, subject to shareholder approval at the forthcoming Annual General Meeting. Furthermore, Santhosh Keshavan has been appointed as an independent director to the board. HDFC Bank will issue its financial results for the first quarter of the financial year, FY26, on Saturday, July 19, at 6 PM.