HDFC Bank had to let go of a lending opportunity worth Rs ₹1 lakh crore in the wholesale business, of which ₹30,000 crore was foregone in Q1 FY24, due to unattractive pricing on the back of intensifying competition including from PSU banks.
On a whole, HDFC Bank expects loan growth to remain healthy with the aim of doubling the balance sheet in four years, it said in a meeting of the top management with Motilal Oswal Securities.
“The recent liquidity build-up (via HDFC Ltd balance sheet) places the bank well to pursue growth in FY24 without worrying much on the funding side. Good momentum in the mortgage business and improved cross-selling will boost growth in retail assets, while stable traction in MSME will help it maintain overall broad-based growth,” the brokerage firm said in a note, pegging loan growth for the merged entity to sustain at 12 per cent over the remaining FY24. It expects loan CAGR will recover to 17 per cent over FY24-FY26.
The private sector lender plans to open 1,400-1,500 branches in FY24, taking the total count to 13,000-14,000. This is in addition to the 500 branches of erstwhile HDFC which will be scaled up over the year.
Over 90 per cent of the new branches are on track to meet business goals and deposit accretion will remain a focus area of the bank as the key source of funding, whereas that of affordable housing and infrastructure bonds will be limited, it said.