Share of HDFC Bank rallied nearly 8% in Tuesday’s trade after the private lender has said its advances aggregated to Rs 9.93 lakh crore as of March 31, marking a growth of about 21% as compared to Rs 8.19 lakh crore a year ago and Rs 9.36 lakh crore on December 31, 2019.
The bank’s deposits aggregated to Rs 11.46 lakh crore, clocking a growth of 24 per cent as compared to Rs 9.23 lakh crore as of March 31, 2019 and Rs 10.67 lakh crore on December 31, 2019.
HDFC Bank said it purchased Rs 5,479 crore of loans from parent mortgage lender HDFC during the quarter.
The CASA (current account saving account) ratio stood at 42% as of March 31 as compared to 42.4% a year ago and 39.5% on December 31 last year, the bank said in a statement.
During the quarter ended March 31, the bank purchased loans aggregating ₹5,479 crore through direct assignment route under home loan arrangement with Housing Development Finance Corporation (HDFC).
Lenders and finance companies are facing stiff challenges from the current scenarios.
The rapid and widening spread of COVID-19 deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets.
We believe large private banks are better than NBFCs as balance sheet management and lower growth concerns stay. Secured loan based entities are more preferable than unsecured in the current environment
Shutdown and restriction undertaken amid outbreak of Covid-19 could impact credit offtake, with repayment in MSME and retail segment at risk.
Consequently, banks with higher exposure to MSMSE segment remain more vulnerable.
In the near term, pace of advances is expected to remain benign, especially in the MSME and retail segment.
However, as the situation normalises, the large industrial sector is poised to grow steadily compared to small & medium industry.
HDFC Bank has efficiently focused on retail business and has garnered strong liability franchise to yield superior profitability over the years. Seasoned portfolio and management experience led to higher than industry advances growth at 24% CAGR in FY08-19
Enriched customer experience, strong network of 5345 branches and focus on digitisation have enabled it to build a strong liability franchise with CASA comprising over 40% of deposits.
This document is meant for the recipient only for use as intended and not for circulation. This document should not be reproduced or copied or made available to others. The information contained herein is from the public domain or sources believed to be reliable. While reasonable care has been taken to ensure that information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. Also above note is not a recommendation to Buy or SELL and is only a view based on facts and figures and we will be in no way responsible for any losses incurred by anyone who uses this information to either trade or invests securities mentioned herein.