They’ve been working on the retailization of their deposit base as a key imperative for a while now. Its gone from ~13k Cr of retail CASATD in 2019 to 1.5L Cr in 2024. Wholesale deposits have moved from 27k Cr to 42k Cr in the same period so the nature of their deposit base has completely changed. Can’t comment on how these are split by balance buckets as banks don’t give that info out.
They’ve been garnering deposit market share despite the war that’s out there so clearly doing something right there. While it started as an interest rate play, it’s no longer the primary driver I think especially since they cut the rate to 3% in the <1L bucket. Mgmt says they didn’t see outflows despite the drop. Over a certain balance threshold (different for different people), you start competing with FD rates anyway so if you can pull SA balance at 6% that’d have otherwise gone into a FD in some other bank, it’s a win anyway. The true granular SA (<1L) is at 3% for them so no rate play there.
As far as salary accounts go, it’s about quality of these A/Cs more than the quantity and HDFC is in a league of it’s own there. Number of other banks manage to get these A/Cs but getting the desired balance there is difficult. If you fail there, these A/Cs barely remain profitable on a cost to service POV, let alone result in good CLTV. So yeah, they have a fight there but it’s the same for most banks. Getting good salary accounts is tough.
On the NPA front, their NPAs are good and VV has been very vocal about keeping them that way. I remember him mentioning their NPAs even on the unsecured book is low but don’t recall if he mentioned a number. Future’s uncertain but VV has delivered on the promises so far and given the confidence with which he mentions keeping NPAs in check, I’m willing to go with him unless proven otherwise. He’s the main reason I invested in the stock anyway once they demonstrated they’d turned a corner.
Disc - I’ve tracked IDFC for a while now and took a position at around the 45-50 mark so I may be biased. I’m strongly considering adding to the position so there’s that as well.
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