Indian lenders' loan growth picks up pace in December quarter
- IBEF
- January 6, 2026
HDFC Bank, India's largest private sector lender, posted sequential loan and deposit growth for the quarter ended December 31, driven by strong consumer spending during the festive season and recent tax cuts that helped boost credit demand. Gross loans rose 2.7% to Rs 28.45 trillion (US$ 319.66 billion), while deposits also rose 2.1% to Rs. 28.6 trillion (US$ 321.35 billion), said the bank's business update. This comes against a wider recovery in credit action across Indian lenders and underlines how HDFC Bank remains able to attract borrowers and depositors despite headwinds from uncertainties over the global economy and intense competition in the market. Its LDR has been an area of focused attention in the wake of its merger with HDFC, which largely increased its loan book but added relatively few deposits - prompting an ongoing effort to balance asset and liability growth.
Despite the positive sequential trends, the broader banking sector continues to watch how deposit growth keeps pace with rising credit demands. HDFC Bank has indicated that it expects its loan growth to match or exceed industry levels in FY26 and beyond, while aiming to restore its loan-to-deposit ratios to more comfortable pre-merger levels between 85% and 90% by 2026–27. Investors and analysts say the bank’s ability to maintain healthy deposit mobilisation along with robust credit expansion will hold the key to sustaining margins and liquidity. The performance also contributed to mixed market sentiment, as share prices fluctuated following the update, underlining how banking metrics influence broader financial markets.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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