HDFC Bank has no plans to aggressively raise interest rates to attract new deposits — and will, instead, focus on improving its profitability metrics over the medium to long term.

Sashidhar Jagdishan, MD and CEO of HDFC Bank, has clearly indicated that the bank isn’t going to offer rate lollies to try and crank up the pace of deposit growth which has flagged vis-à-vis credit growth.

On Saturday, the country’s largest private sector bank had reported a net profit of Rs 16,511.85 crore in the March quarter compared with Rs 16,372.54 crore in the October-December 2023 period.

Core net interest income (interest earned less interest expended) rose to Rs 29,080 crore from Rs 28,470 crore in the preceding three months. Total deposits were at Rs 23,79,800 crore compared with Rs 22,14,000 crore on a sequential basis.

During a conference call with analysts, Jagdishan refused to offer any specific guidance, saying that it “works as a distraction towards the long-term objective”. He added that the key financial metrics of HDFC Bank have remained stable, largely on account of the resilience of its franchise. “This should be a positive that the resilience of the institution continues despite adverse macro conditions,” he said.

According to the HDFC Bank CEO, the focus over the medium (2-3 years) to long term will be on the improvement of profitability metrics like return on assets (RoA) and earnings per share (EPS). However, the most important priority will be to sustain the deposit franchise, particularly garnering retail deposits.

He observed that there will be no short-cuts amid an intense competitive environment. Further, HDFC Bank will ensure that it will be on a par with key players in the market and not “over price ourselves”.

Jagdishan disclosed that the road to maintain the momentum will be enhanced customer engagement and an elevated service-first culture. “The intensity of this will be heightened,” he said, adding the bank will continue to invest in distribution, people and technology.