1. HDFC Bank shares at all-time high as Q4 NPAs remain flat amid banking stress

HDFC Bank shares at all-time high as Q4 NPAs remain flat amid banking stress

HDFC Bank’s shares made a new all-time high today after the country’s largest private sector bank reported that its NPAs (non-performing assets) remained stable in the fiscal fourth quarter.

By: | Published: April 21, 2017 2:20 PM
The bank’s shares hit Rs 1,491.8 on NSE after the release of quarterly results, rising 2% from the previous close.

HDFC Bank’s shares made a new all-time high today after the country’s largest private sector bank reported that its NPAs (non-performing assets) remained stable in the fiscal fourth quarter, even as the discourse about the stress in the banking sector on account of bad debts and stressed assets gains momentum.

The bank’s shares hit Rs 1,491.8 on NSE after the release of quarterly results, rising 2% from the previous close. HDFC Bank was the second largest contributor on NSE Nifty, contributing 12.5% to the benchmark index gains.

HDFC Bank has fared well on the aspect of bad loans, with its Gross NPAs (non-performing assets) remaining flat on-quarter at 1.05% during Jan-Mar. Absolute gross NPAs were at Rs 5,885.7 crore in the latest reporting period, rising from Rs 5,232 core in the preceding quarter. Its Net NPA rose marginally to 0.33% in the quarter from 0.32% from the preceding three-month period.

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However, provisions rose substantially, as expected, specially following the Reserve Bank of India’s pro-active approach in nudging the banks towards identifying areas of concerns. HDFC Bank’s provisions in Jan-Mar rose 76% on-quarter to Rs 1,261.8 crore from Rs 716 crore. The company said that the provisioning consisted of a specific loan loss provision of Rs 978 crore, and general provisions of Rs 280 crore.

HDFC Bank’s fiscal fourth quarter net profit was at Rs 3,990 crore, broadly in line with the street expectations, while its income from interest beat estimates. India’s largest private sector bank’s Jan-Mar net profit was slightly higher that Reuters’ consensus estimate of Rs 3,956 crore, while the lender’s net interest income at Rs 9,055 crore topped ET Now’s estimate of Rs 8,670 crore. The company’s net interest margin too, improved by 20 basis points to 4.3% in the fourth quarter from 4.1% in the third quarter.

As at the end of the quarter on March 31, HDFC Bank’s CASA (current account and savings account) deposits were at a healthy 48% of the total deposits. Its deposits as on March 31 at Rs 6.4 lakh crore rose 12.3% on-year, while advances at Rs 5.55 lakh crore were up 19.4% on-year.

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