HDFC Bank plans to open another 1,000 branches in 2024, taking the total number of branches to about 13,000 in 3-5 years, CFO Srinivasan Vaidyanathan said in the bank’s earnings call.

“We have added 908 branches in the last twelve months and 146 branches in the last quarter,” Vaidyanathan said adding that in 2023 the bank had opened 1,481 branches.

Strategic expansion

“The important aspect for our granular deposit growth is the reach. And we are expanding our reach so that we can get the customers there,” he said, adding that while going ahead, the magnitude of branch opening may not as much as 2023, the bank does expect to open around 1,000 branches every year to expand into every geography.

As of December 2023, HDFC Bank had 8,091 branches and 20,688 ATMs across 3,872 cities and towns, of which 52 per cent are in semi-urban and rural areas.

It added 22 lakh liability relationships in Q3 FY24 and 74 lakh in the nine-month period ended December 2023, Vaidynathan said, adding that these are primary banking relationships and their deposits will come through with a lag as per the maturity cycle of deposits.

Even so, the bank continues to gain 18-20 per cent market share on an incremental basis and also sees an opportunity for deposits from existing mortgage customers.

Deposits of the bank rose 27.7 per cent y-o-y to 22.14 lakh crore, led by 42.1 per cent growth in time deposits and 9.5 per cent in CASA deposits. Retail deposits accounted for 84 per cent of total deposits, growing 2.9 per cent on quarter whereas non-retail deposits fell 3.3 per cent as the bank chose to stay away from high cost deposits.

CASA ratio of the bank stood at 37.7 per cent at the end of December compared with a pre-merger ratio of about 42 per cent. Vaidyanathan said that this provides the bank an opportunity to grow the CASA deposits and to “get that (CASA Ratio) up working with our customers”.

Current account deposits stood at ₹2.5 lakh crore and savings account deposits at ₹5.8 lakh crore as of December 2023.

“We’ve are hopeful that as we go into FY25, we build more momentum on the deposits so that we are able to to get the granular funding, and over time replace the borrowing which is a higher cost, and thereby support the margins,” he said.