Mumbai: HDFC Bank shares continued to remain weak and fell for the third consecutive trading session this week. By 3:05 pm, the stock was trading at Rs 948.45 on the NSE, down 1.43 percent for the day. Over the week, the shares have slipped by more than 5 percent, despite the bank reporting healthy growth numbers in its latest quarterly business update.

Q3 business update remains strong

Earlier this week, HDFC Bank released its business update for the third quarter of FY26, which showed steady growth. The bank’s average advances under management increased by 9 percent year-on-year to Rs 28.63 lakh crore. Gross advances also rose sharply by 11.9 percent to Rs 28.44 lakh crore, reflecting strong demand for loans.

On the deposit side, average deposits grew 12.2 percent year-on-year to Rs 27.52 lakh crore. This included CASA deposits of Rs 8.98 lakh crore, up 9.9 percent, and time deposits of Rs 18.53 lakh crore, which rose 13.4 percent. On the surface, these numbers point to a solid operational performance.

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Loan-to-deposit ratio raises concern

Despite the strong growth, investors remain worried about the bank’s rising loan-to-deposit ratio (LDR). During the third quarter, HDFC Bank’s LDR climbed to 99.5 percent, up by 50 basis points. LDR shows how much of a bank’s deposits are being used to give loans.

A very high LDR means the bank has less cash available to meet withdrawals and may need to borrow funds at higher costs. For comparison, the overall banking system’s LDR stands much lower at around 81.6 percent, according to RBI data. This gap has made investors cautious.

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Why loan growth is outpacing deposits?

Loan demand has remained strong in recent quarters due to multiple RBI rate cuts, which have made borrowing cheaper. Auto, gold and personal loans have also picked up due to festive demand and policy support. However, deposit growth has lagged as fixed deposit rates have fallen and investors are exploring better-return options outside banks.

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Some experts believe the high LDR may not be a major risk as asset quality remains stable and new liquidity rules could provide relief over time.

Block deal adds to volatility

Adding to the pressure, HDFC Bank shares also saw a large block deal where about 1.80 crore shares changed hands, worth roughly Rs 1,756 crore. While details of the buyer and seller are not known, such large transactions often increase short-term volatility in stock prices.