ADVERTISEMENT

HDFC Bank Result Update — Credit Mix Led Margins Erosion: Systematix

HDFC Bank Result Update - Credit Mix Led Margins Erosion: Systematix

<div class="paragraphs"><p>A customer wearing a protective mask approaches a HDFC Bank Ltd. mobile ATM van. (Photographer: Dhiraj Singh/Bloomberg)</p></div>
A customer wearing a protective mask approaches a HDFC Bank Ltd. mobile ATM van. (Photographer: Dhiraj Singh/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Systematix Report

In Q4 FY22, HDFC Bank Ltd. performance was below our expectations.

Lower margin (calculated on quarterly average balances), fee income pace below credit growth and treasury losses led to the subdued return ratio.

Change in credit mix in favor of commercial & rural banking, agriculture and whole-sale loans and lower retail loans composition led to unexpectedly higher compression in credit yield as compared to deposit cost.

Based on the RBI’s published data on WSS and credit deployment data (on retail & retail trading verticals), HDFC Bank’s incremental market share in retail credit (excl. agriculture credit) would be ~8% assuming there’re not many variations in RBI’s & the bank’s retail credit classifications.

Click on the attachment to read the full report:

HDFC Bank Q4FY22 Result Update-Systematix.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.