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ICICI Bank pulls ahead of HDFC Bank on loan growth and margins
ICICI reported nearly 20% year-on-year loan growth to ₹16.3 trillion, while HDFC’s loan growth was 16% and its loan-to-deposit ratio stayed at 96% after the July 2023 merger.
ICICI Bank expanded faster than HDFC Bank in the June quarter, outpacing its larger rival on loan growth, net interest margins, and profitability, according to LiveMint Markets. ICICI logged nearly 20% year-on-year loan growth to ₹16.3 trillion, ahead of the industry’s 18.6% credit growth and HDFC’s 16% growth to ₹30.4 trillion.
ICICI’s net interest margin rose 4 basis points sequentially to 4.36%, though the improvement was described as primarily aided by higher interest on tax refunds. Net profit grew 16% year-on-year to ₹14,800 crore, and return on assets improved to 2.5% from 2.4% in the prior quarter.
HDFC, meanwhile, continued to work through post-merger effects following its July 2023 combination with HDFC Ltd. The bank’s faster deposit growth of 15% versus ICICI’s 14% was not enough to lift credit growth, as its loan-to-deposit ratio remained at 96%, compared with ICICI’s 89%.
Margins were a key concern for HDFC, with its net interest margin declining about 10 basis points in the quarter to 3.4%, while net profit grew 5% year-on-year to ₹19,060 crore and ROA slipped to 1.9%. On asset quality, HDFC’s gross NPA was 1.2% versus ICICI’s 1.4%, and JM Financial Institutional Securities said HDFC’s liquidity coverage ratio of 115% would continue to constrain retail-led growth.