After reporting a jump in deposits and advances during the last quarter of financial year 2020, India’s largest private sector lender, HDFC Bank saw its share price jump up by 7.7 per cent to trade at Rs 876 per share. The upward jump on the bourses was mirrored by another private lender, Kotak Mahindra Bank, as deposits and advances grew. The share price gained 7.8 per cent to trade at Rs 1,229 per share. This comes as a much-needed boost for the private sector banks, who have been beaten down bad by the bear market in the recent months.
HDFC Bank reported a 24 per cent jump in deposits from December 31, 2019 to March 31, 2020. The bank’s deposits aggregated to approximately Rs 10.67 lakh crore in December, the same reached Rs 11.47 lakh crores at the end of the previous fiscal year. On the other hand, Kotak Mahindra Bank, saw its savings deposits grow by 14 per cent to reach Rs 1.04 lakh crore from Rs 91,729 crore quarter-on-quarter. Current deposits for the lender grew by 17 per cent to reach the Rs 43,000 crore mark. Total customer deposits for Kotak Mahindra Bank jumped from Rs 2.31 lakh crore to Rs 2.58 lakh crore in the last quarter of the previous financial year.
HDFC Bank informed the stock exchanges on Friday that the loans advanced by the lender grew by 21 per cent in the march quarter to reach Rs 9.93 lakh crore from Rs 9.36 at the end of December 2019. In a filing to the bourses, HDFC Bank said, “During the quarter ended March 31, 2020, the Bank purchased loans aggregating ₹54.79 billion (Rs 5479 crore) through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation Limited.” Loans zoomed at 1.3 per cent for Kotak Mahindra Bank in the fourth quarter to reach Rs 2.19 lakh crore. The current account-savings account ratio for both the lenders increased in the March quarter. While HDFC Bank’s CASA ratio stood at 42 per cent, that of Kotak Mahindra Bank was 56.2 per cent.
Kotak Mahindra Bank is also riding on the hope that Morgan Stanley Capital Investment (MSCI) will increase India’s weightage on its indexes which, according to a report by Motilal Oswal could help the stock bag close to $1.58 billion in the coming months if the revision is made.
With India’s third largest private sector lender, going through a RBI led restructuring process, experts have been predicting short term skepticism among the public over banking with private lenders. However, many have also warned that leading private banks with strong balance sheets could benefit from the Yes Bank saga, as customers look for safer banks to keep their money. Other private lenders like IndusInd Bank reported a 7 per cent fall in deposits.
Domestic benchmarks are trading in the green today as they opened for trade for the first time this week. S&P BSE Sensex is up by 1,700 points or 6 per cent at 29,275 points, while the broader 50 stock Nifty jumped 501 points or 6.2 per cent to sit just below the 8,600 mark during the trading hours on Tuesday.