HDFC Bank Q1 Review - Weak Retail Margins; One-Off Income Aids Bottomline: Systematix
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Systematix Research Report
HDFC Bank Ltd. reported a weak core performance in Q1 FY22, with a rise in lower-yielding asset composition leading to margin compression.
In the non interest income stream, foreign exchange gains contributed significantly though core fee income is still not back to its usual run-rate due to moderation in the credit expansion pace.
On the asset quality front, credit costs (including contingent provisions) were elevated at 167 basis points (154bps YoY and 164bps QoQ) while the provision cover slid to 67.9% (76.2% YoY and 69.8 QoQ).
HDFC Bank made an additional contingent provision of Rs 6 billion, totalling Rs 65.9 billion.
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