Q4 results of HDFC, ICICI today

The two largest private sector banks-HDFC and ICICI-will kick-start the Q4 and FY25 earnings season for the banking sector, and their results will be declared on Saturday.

- Anshika Kayastha

While the last quarter of a financial year is typically one of accelerated growth for lenders and financial institutions, this time around, the business trends are seen softer on the back of slower growth in loans and deposits, pressure on margins and pockets of asset quality stress.

Mint takes a look at the key points to watch out for in the banks' earnings today:

LOAN GROWTH SLOWS

Growth in advances for both banks is expected to be softer in FY25, with Motilal Q4 Oswal Securities pegging HDFC Bank's loan growth for FY25 at around 11%, led by the retail, commercial, and rural banking segments.

In its initial business updates, HDFC Bank-which has been consciously going significantly slower on credit growth to shore up its credit-deposit ratio (CD)-declared loan growth of 5.4% on year for Q4 FY25, higher than 3% a quarter ago.

"The headline reported numbers were better-than-expected on loan growth but weaker than industry average, reflecting the changes that they are undertaking to improve their CD ratio," Kotak Institutional Equities said in a pre-earnings note, adding that the CD ratio is expected to have improved 180 basis points sequentially to 97%.