HDFC Bank Q1 Review - Moderate NII Growth, Elevated Slippages; Recovery In The Offing: ICICI Securities
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ICICI Securities Report
HDFC Bank Ltd.’s decadal low net interest income growth at 9% YoY in Q1 FY22 dragged earnings growth below expectations at 16% (against past six-year average of 18-20%).
Net interest margins (at 4.1%) settled at the lower end of the guided range.
HDFC Bank's slippages, amid second Covid-19 wave disruption, too were elevated at 2.54%, though partially offset by sale of non performing assets (Rs 18 billion) and write-offs (Rs 31 billion).
Gross non performing assets rose only marginally to 1.47% (from 1.32% in FY21) and credit cost was contained at 1.7%. Stage-III assets for its subsidiary, HDB Financial Services Ltd., almost doubled.
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