Balancing act: Can the new HDFC Bank regain its pre-merger old glory

After a challenging year post-merger, HDFC Bank looks poised for a strategic path forward

For over a decade, HDFC Bank consistently outperformed industry growth rates in both deposits and advances, maintaining impeccable asset quality. Amidst a landscape where other banks struggled with soaring non-performing assets (NPAs), HDFC Bank thrived, eventually surpassing ICICI Bank to become the largest private sector lender in India. Its net interest margin (NIM) remained stable in the range of 4.1-4.4 per cent.

However, in the year since mortgage financier, Housing Development and Finance Corporation (HDFC), merged with the bank on July 1, 2023, the dynamics have shifted.

Post-merger, HDFC Bank’s loan book increased by over Rs 6