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(Reuters) -India's biggest private lender HDFC Bank on Friday said that the sequential rise in deposits outpaced loan growth in the fiscal second quarter.
The Mumbai-based bank's gross advances, or loans sanctioned and disbursed, rose 1.3% to 25.19 trillion rupees ($300 billion) in the quarter ending September following a 0.8% decline in the previous quarter.
Retail loans grew by around 338 billion rupees while commercial and rural banking loans grew by around 380 billion rupees from a quarter earlier, HDFC Bank said in a statement.
Corporate and other wholesale loans fell 133 billion rupees from a quarter earlier, it said.
Deposits rose 5.1% from the previous quarter to 25 trillion rupees, after no sequential change in April-June.
Aggregate low-cost current account and savings account deposits rose 2.3%.
HDFC Bank merged with parent HDFC in July 2023, with the deal adding a large pool of loans to its portfolio, but a much smaller amount of deposits.
As a result, the bank's loan-to-deposit ratio (LDR) rose to around 110% after the merger, putting it under pressure to increase the pace at which it raises deposits or to slow loan growth.
LDR is a metric used by banks to assess their liquidity position by assessing whether they have enough deposits to fund loan growth.
HDFC Bank had said in July that it aimed to bring down the LDR in the coming quarters as deposits would grow faster than loans.
In the September-quarter, the bank securitised 192 billion rupees of loans as a strategic initiative, it said. For the year, the bank has securitised loans worth 246 billion rupees.
($1 = 83.7930 Indian rupees)
($1 = 83.9580 Indian rupees)
(Reporting by Siddhi Nayak in Mumbai and Varun Hebbalalu in Bengaluru; Editing by Varun H K and Mrigank Dhaniwala)