HDFC Bank Loan Growth Surges Past Expectations

HDFC Bank demonstrated strong performance in the June 2026 quarter, with loan advances growing 12.4% year-on-year to Rs 31.27 lakh crore. This surge in lending occurred despite concerns over the Middle East crisis potentially slowing the domestic economy and credit demand. Deposits also experienced considerable growth, increasing by 14.7% year-on-year to Rs 31.7 lakh crore, primarily driven by a 17.4% rise in time deposits.

The bank's credit-to-deposit ratio stood at approximately 98.6% in the June 2026 quarter. This improvement in key financial metrics comes as HDFC Bank addresses investor concerns regarding corporate governance. Following an investigation into claims by its former part-time chairman, and the appointment of a new chairman, investor sentiment for the bank's stock has shown positive signs, with its price rising from a recent 52-week low.

Previously, following its merger with HDFC on July 1, 2023, the bank had maintained a more cautious approach to loan growth. Its credit-to-deposit ratio had peaked at 104.4% in the March 2024 quarter. However, the recent strong loan growth indicates a potential turnaround, with the bank's stock trading at reasonable valuations compared to peers like Kotak Mahindra Bank.