Q4 updates, views on HDFC Bank, RBL, YES, IndusInd, Bandhan, BOB ahead of quarterly results

Axis Bank Ltd, CSB Bank Ltd, RBL Bank Ltd, Bandhan Bank, YES Bank, Bank of Baroda, Union Bank of India, AU Small Finance Bank and Ujjivan Small Finance Bank reported a strong set of business updates for the March quarter. In contrast, provisional numbers from Karur Vysya Bank, IndusInd Bank and Punjab National Bank were soft, Equirus Securities said on Monday.

"Overall business momentum remains healthy with advances/deposits growth at 4.8 per cent/6.1 per cent qoq (aggregate). Deposit growth continues to outpace credit, leading to LDR moderation across Large /mid-sized private banks (280bps/180bps QoQ), while regional banks saw 90 bps expansion. SOE and SFBs largely stable QoQ," Equirus said.

The brokerage said credit growth in Q4 was led by gold loans, transport operators, NBFCs, and traders. It expects working capital demand to have been strong in the March quarter. 

Strong sequential end-of-period (EoP) CASA growth across banks appears largely period-end driven, with divergence vs softer quarterly average balance (QAB) trends, it said.

Equirus said HDFC Bank reported healthy deposit growth on an EOP basis, but QAB deposit growth at 12.8 per cent YoY and 3.6 per cent QoQ was softer than its expectations.

On Axis Bank, the brokerage noted improving business traction, with the growth bias turning positive. IDFC First Bank lagged peers sequentially, particularly on deposits, it said.

Equirus flagged continued weak trends at IndusInd Bank amid balance sheet clean-up and realignment. RBL Bank, however, saw strong traction, with advances rising 11 per cent QoQ, led by secured retail and wholesale segments, while deposit growth was driven largely by bulk deposits and CASA growth appeared lumpy.

For Bank of Baroda, retail advances growth trailed overall advances growth, and with limited loan-to-deposit ratio headroom, margin trajectory remains a key monitorable, the brokerage said.

Equirus said Karur Vysya Bank reported full-year growth, marginally ahead of guidance, though fourth-quarter trends were weaker versus history and peers. AU Small Finance Bank continued to outperform with strong advances and deposit growth.

On Union Bank of India, the brokerage highlighted a second consecutive quarter of above-system growth post the management change. It  viewed the PSU bank as a re-rating candidate.