HDFC Bank, Kotak Mahindra Bank, and Yes Bank reported strong double-digit growth in deposits and advances for the first quarter of FY27. These provisional business updates highlight a healthy trend for major private lenders, though performance varied across smaller banks. Investors are watching these metrics to gauge how rising deposit costs and credit demand are impacting bank profitability in the current environment.
Major private sector banks have begun releasing their provisional business performance data for the first quarter ending June 30, 2026. These early snapshots are essential for understanding how the banking sector is managing the balance between credit growth and the cost of mobilizing deposits in the current financial year.
Growth Across Major Private Lenders
HDFC Bank, the country's largest private lender, maintained steady momentum with gross advances rising 15.4% year-on-year to Rs 30.61 lakh crore. Its total deposit base also grew by 14.7% to Rs 31.7 lakh crore. For investors, the bank's ability to sustain double-digit growth in both loans and deposits remains a key indicator of its scale and reach. Meanwhile, Kotak Mahindra Bank reported a 15.1% rise in net advances to Rs 5.12 lakh crore. The lender is currently integrating the retail and wealth management operations recently acquired from Deutsche Bank, which remains a key area for shareholders to monitor in upcoming quarters.
Yes Bank also showed expansion with an 18.4% year-on-year increase in loans and advances, reaching Rs 2.85 lakh crore, while deposits grew 14.3% to Rs 3.15 lakh crore. However, the bank experienced a 7.8% sequential decline in CASA deposits, bringing its CASA ratio to 32.7%. The CASA ratio, which measures the proportion of deposits held in low-cost current and savings accounts, is a vital metric as it directly influences a bank's cost of funds and overall profit margins.
Diverse Trends in the Banking Sector
Not all lenders followed the same growth path. IndusInd Bank reported a 2.3% year-on-year decline in net advances to Rs 3,26,171 crore. While total deposits grew by 4.5%, the bank's CASA ratio dropped to 29.5%, suggesting potential pressure on its funding mix. In contrast, AU Small Finance Bank reported a strong 23.5% jump in total deposits, reaching Rs 1,57,730 crore, alongside a 22.6% expansion in its loan portfolio.
The divergence in these numbers highlights the varying business strategies within the Indian banking sector. Larger banks are focusing on maintaining scale and stable deposit growth, while specialized lenders are pursuing higher growth rates in specific segments.
Investors tracking these developments should focus on the upcoming full quarterly results, which will provide clarity on net interest margins, or the difference between interest earned and interest paid, and asset quality. Rising deposit costs have been a common challenge across the industry, and the upcoming disclosures will reveal which banks have been most successful in managing these costs without compromising their profit margins or growth targets.