Synopsis
- Net Interest Income (NII) of select Scheduled Commercial Banks (SCBs) compared to previous quarter, saw a relatively slower growth of 9.7% year-on-year (y-o-y) to Rs. 2.03 lakh crore in Q1FY25 driven by healthy credit growth, which was partially offset by rise in deposits costs and a dip in yields on advances.
- SCBs reported a robust rise in advances at 18.1% y-o-y in Q1FY25 driven by the merger and personal loans.
- Meanwhile, SCBs witnessed a 13.7% y-o-y deposit growth for the quarter. PVBs’ deposits rose by 23.2% y-o-y while PSBs registered a slower pace of 9.0%. Deposit growth lagged credit growth with sluggish current account and saving account (CASA) growth (3.3% y-o-y), which was partially offset by the robust growth in Time Deposits (17.8% y-o-y). CASA ratio continued to decline and reached 32.3%.
- The Credit and Deposit (C/D) ratio stood at 80.6% as of June 30, 2024, expanding by ~430 bps y-o-y over a year ago due to widening credit-deposit growth and HDFC merger impact.
- The Net Interest Margin (NIM) for SCBs dropped on a year-on-year basis by 13 bps and stood at 2.94%, as the rising cost of deposits along with slower growth in CASA impacted the NIM margin.
Bank_NIMs_Continue_to_Experience_Sequential_Strain_in_Q1FY25
