HDFC Bank shores up provisions as agri slippages rise; margins under pressure

Mumbai: HDFC Bank increased the presentation bumpers that led to a marginal degradation in asset quality in the quarter of the quarter (quarter) ending in June (quarter 26). While the quarterly loan and deposits have seen a stable growth, the margin pressure continued – and the bank said that this trend would continue at least one more quarter.

During the period, the HDFC Bank generated an income. LaThe first public offering of HDB financial services (IPO) 9.130 Crore. Provisions La1,440 crore, sharply higher La3.190 Crore and in March quarter LaCompared to the previous year, it focused on 2,600 crore and the lower line.

“These are not for a particular portfolio or the expected risk, but for any portfolio or expected risk. He said.

Slings were standing in the quarter La9,000 crore around LaThe 2,200 Crore came from the bank’s agricultural loan portfolio. Farm loan defaults usually rise in the first and third quarter of the fiscal year and normalize in the second and fourth place.

Vaidanathan said, “Apart from the seasonal Ağri book, the shifts were very stable and stable,” Vaidanathan said.

The non -gross performance (NPA) ratio rose to 1.3% from the end of June, both quarter and a year ago. NET NPAs rose from 0.4% to 0.5% during both comparison periods.

Gross developments increased by 6.7% annually LaAs of June 30, 26.5 trillion, 8.1% growth in retail loans, 17.1% in SME loans and 1.7% in institutional and wholesale loans increased. Overseas loans made up 1.7% of total progress.

While loan growth across the sector is slowing down up to 9-10%, Vaidanathan Hdfc Bank focused on expanding his credit book. The lender, former parent HDFC Ltd.

Previously, while the loan growth was following the industry in the 2005 fiscal year, he stated that he expected to leave him behind by gaining the market share in 26 fiscal years and finally reclaiming the market share.

Vaidyanathan, the bank, consumption, 60% of India’s GDP contribute to 60% of the retail and consumer segments that will remain as an important focal area, he said.

“In order to support credit growth, we have both monetary policy and fiscal policy results and we expect consumption expenditures and credit growth to gain momentum with the start of the festival cycle. So we have to wait and see.”

In retail loans, personal loans were 30%, then automatic and two -wheeled loans were 24%and 17%. Mortgage has grown 7% annually and 0.9% in order. Vaidyanathan, the bank, especially from public sector banks, due to harsh pricing competition remained selective in mortgage loans, he said.

“We want the right customer for a holistic relationship and it does not only focus on giving credit. The new mortgages we provide, we open a savings account with mortgages at the same time for almost 99% and are financed anywhere between the savings account LaInitially, 30,000 to 35,000. ”

Vaidyanathan in wholesale loans, in the middle of prices from the peers, said the major corporate borrowing was suppressed.

“While loving quality, we were selective in presenting and waiting for rates, at least the rates offered by banks to larger companies to be stable,” he said.

Credit growth is fixed, but margin pressure continues

Net Interest Income (NII) increased by 5.4% annually La31,440 Crore. Core Net Interest Margin (NIM) was 3.35% from 3.46% in the previous quarter.

Vaidanathan did not offer margin guidance, but higher funding costs were the only pressure point due to increasing borrowing costs and weak growth in CASA (current and savings account) deposits.

“Now, as the rates fall, policy falls, historically, when the policy rate decreased in the last 10-15 years, we saw that the Casa ratio emerged from the industry.” However, he said that the policy rate of the current environment will be uncertain whether it will remain at these levels. The Indian Reserve Bank (RBI) reduced the repo ratio 100 basis points between February and June.

“So where it goes from here, the rate needs to be stable. In June, you have seen a reduction of 50 basis points less than the RBI. And that’s why it has to take into account exactly.”

The funding cost for the bank fell about 10 basis points in the first quarter, but the return on loans faster faster than 20-22 basis points. Approximately two -thirds of the credit book depends on external comparison -based pricing.

Total deposits increased by 16.2% annually La27.6 trillion as of June 30. Casa deposits increased by 8.5%, while 33.9%of the total, while time beds increased by 20.6%.

“We expect that our deposit growth momentum should continue and we should continue to gain the market share we have gained historically, ve