HDFC Bank shares remained in focus on Wednesday as banking stocks reacted to the Reserve Bank of India's 25-basis-point repo rate hike from 5.25% to 5.50%. The stock traded at ₹707.05 on the NSE at 10:40 am after opening at ₹708.55, before dipping 1% to ₹704.50 after hitting a high of ₹711, compared with the previous close of ₹711.45. According to The Hindu BusinessLine, trading volume stood at 93.62 lakh shares with a traded value of ₹661.61 crore. The total market cap was at ₹10.90 crore with an adjusted P/E ratio of 13.69.
HDFC Bank delivered robust financial results for the second quarter, with loan growth reaching 16% year-on-year and deposits rising 19% YoY, as reported by The Hindu BusinessLine. The strong performance comes as the bank prepares for its leadership transition under new MD & CEO Anup Bagchi, who was appointed following RBI approval on October 1, 2026 for a three-year term beginning October 27, 2026. Bagchi will be the first outsider to occupy HDFC Bank's corner office, marking an important break from the institution's tradition of promoting leaders from within.
The bank's ₹1.5 trillion deposit mobilization was significantly boosted by a $11.5 billion (₹1.10 trillion) mobilization of FCNR-B deposits between June 8 and August 31 under the RBI's special foreign currency USD/INR swap facility. As per The Financial Express, HDFC Bank issued $2.5 billion (₹23,960 crore) of USD denominated senior unsecured bonds during June-August 2026. The overseas branches extended loan facilities aggregating to $5.7 billion (₹54,770 crore) against these deposits, while standby letters of credit issued to other banks aggregate to $3.1 billion (₹29,340 crore). The bank's deposits and advances stood at ₹33,27,500 crore and ₹32,19,500 crore respectively as of September-end 2026. In contrast, ICICI Bank mobilised $17.88 billion in FCNR(B) deposits and raised $3.55 billion through dollar-denominated bonds during the same period.
The bank's gross advances in the September quarter grew 16% to approximately ₹33.07 lakh crore from ₹27.46 lakh crore as of September 30, 2025, as per provisional data released by HDFC Bank. Average advances under management were ₹31.87 lakh crore for the September 2026 quarter, recording a growth of around 14.0% over ₹27.94 lakh crore for the corresponding September 2025 period. The bank's period end advances under management increased 16% to ₹33.07 lakh crore from ₹28.68 lakh crore year-on-year, demonstrating consistent growth across the loan portfolio. The growth in loans for the September 2026 quarter is particularly commendable as it comes during the traditionally slack monsoon season, with the bank showing strong demand for loans despite deficient rainfall in several states. According to a Jefferies report, after excluding the FCNR-B impact, the corresponding growth was estimated at 14%.
Deposit growth continued to outpace loan growth on a YoY basis, with the lender's period end deposits rising 19% to ₹33.27 lakh crore as of September 30, from ₹28.01 lakh crore, YoY. Average deposits were ₹31.66 lakh crore, recording a growth of around 16.8% from ₹27.10 lakh crore for the corresponding September 2025 period. The bank's low-cost CASA deposits grew 10.8% to ₹10.52 lakh crore during the September quarter from ₹9.49 lakh crore, YoY, while time deposits increased 22.8% to ₹22.75 lakh crore from ₹18.52 lakh crore, YoY. On a sequential basis, average deposits increased 5.1% from ₹30.12 trillion in the June quarter, as reported by The Financial Express. Kotak Mahindra Bank also reported strong deposit growth with period-end deposits growing 23.2% YoY to ₹6.51 trillion in Q2FY27, while mobilising $5.78 billion through FCNR(B) deposits. According to Jefferies, after excluding the FCNR-B impact, the corresponding deposit growth was estimated at 15%.
HDFC Bank's credit-to-deposit ratio stood at 99.4% in the September 2026 quarter, as reported by The Financial Express, indicating strong loan growth relative to deposit mobilization. This compares to 98% in September 2025 and 99.8% in September 2024. The current ratio is significantly higher than the pre-merger benchmark of 85% in FY23 and the post-merger average of 98% since July 2023. While banks typically maintain a credit-to-deposit ratio of 75% to 80%, the RBI does not prescribe specific ratios, focusing instead on ensuring correlation between credit extended and deposits available. The government-controlled State Bank of India maintains a credit-to-deposit ratio of 76.6% at the end of March 2024, providing context for HDFC Bank's current position.
According to Macquarie Capital's Suresh Ganapathy, deposit growth came in at 18.8% YoY and remained firmly skewed towards term deposits, which rose 19.7% YoY and 6.8% QoQ, while Casa growth was comparatively weak at 10.7% YoY and 1.5% QoQ. He noted that HDFC Bank mobilised ₹1.10 trillion or $11.5 billion of FCNR deposits, representing ₹9% of total industry mobilisation, below its FY26 deposit market share of 12-13%. The RBI introduced the swap facility on June 8 to encourage banks to mobilise longer-tenor FCNR(B) deposits, allowing banks to access dollar-rupee swaps on concessional terms. While the incoming CEO may have a clear mandate to reinvigorate loan growth and reclaim deposit market share, a turnaround in reported performance will take time, with sharper focus needed on rebuilding the Casa franchise. The Financial Express reports that investors will be closely monitoring Bagchi's strategy over the next few quarters to ensure sustained growth on key operational parameters including credit and deposit growth coupled with net interest margins. The repo rate hike could increase borrowing costs for banks and may lead to higher lending rates for customers, while affecting loan demand and deposit rates depending on banks' funding requirements.
