Q1 business updates impact: HDFC, Axis Bank rise up to 2.5%; Kotak Mahindra Bank falls 3.5%

Shares of HDFC Bank and Axis Bank rose up to 2.5% on July 6 while those of Kotak Mahindra bank fell 3.5% after the major private lenders gave the business updates for the April-June period ahead of quarterly earnings.

Country's biggest private lender HDFC Bank reported a 15.4% increase in gross advances during the June quarter, with period-end deposits rising 14.7%.

Axis Bank reported 18.8% growth in gross advances, while Kotak Mahindra Bank's net loan growth stood at 15.1%.

Analysts at brokerage firm Jefferies said HDFC Bank, IndusInd Bank and Bandhan Bank saw a better-than-expected pickup in loan growth, while Kotak Mahindra Bank's growth softened slightly.

Axis Bank's gross advances grew 18.8% year-on-year to Rs 12.73 lakh crore, while total deposits rose 18.2% to Rs 13.73 lakh crore. CASA deposits increased 11.4% to Rs 5.22 lakh crore, and term deposits jumped 22.8% to Rs 8.51 lakh crore.

IndusInd Bank reported sequential growth of 3.3% and 3.8% in net advances and deposits, respectively, for June quarter. Compared to the year-ago period, advances were down 2.3%, while deposits rose 4.5%.

HDFC Bank's gross advances rose 15.4% on year to Rs 30.6 lakh crore as of June 30, while its total deposits were up 14.7% on year at Rs 31.71 lakh crore, the lender said in an exchange filing.

Kotak Mahindra Bank's net advances rose 15.1% on year to Rs 5.12 lakh crore as of June 30, while its total deposits grew nearly 12% on year to Rs 5.73 lakh crore. The bank's current account savings account rose 10.2% on year to INR 2.31 trillion as of June 30, the lender said in an exchange filing Saturday.

At 10:40 am on July 6, Bank Nifty was trading 0.6% higher at 58,262 with HDFC Bank, AU Small Finance Bank leading the gains by rising 2.6% and 2.1%, respectively.

Shares of IndusInd Bank, ICICI Bank and Axis Bank rose 1.6%, 1% and 0.8%, respectively.

Meanwhile, Kotak Mahindra bank shares were trading 3.7% lower at Rs 382.15 apiece after posting a sequential moderation in both loan and deposit growth.

"Most of the banks which reported June quarter provisional numbers have met or exceeded our estimates, with the exception of Kotak and RBL," Piran Engineer, senior research analyst at CLSA told Reuters.

"While overall growth has been strong, we remain watchful of the granularity within loan book expansion and potential impact of declining CASA ratios on margins," Engineer said.