HDFC Bank Q4 Review - Resilience And Consistency: ICICI Securities
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ICICI Securities Report
HDFC Bank Ltd. concluded FY21 – a year of pandemic and business disruption – with 19% earnings growth (almost similar to past 5-year average), 1.32% GNPAs (lower than pre-pandemic levels), 0.6% restructuring, 1.7% slippage run-rate, 1.5% credit cost (including 30 bps contingency buffer), 14% advance growth, and 16% deposit growth.
That’s indeed commendable and what gives us further confidence in the franchise, are:
1) precautionary credit reserve of 60 bps still exists;
2) best-in-class deposit franchise (<4% deposit cost) supporting 4.2% NIMs;
3) beefing-up of resources (123 branches added) to boost retail growth (from 6.7% in FY21); and
4) enhancing technology capabilities to address outage issues.
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