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ICICI Securities Report
HDFC Bank Ltd.'s Q2 FY22 net interest income growth retraced to 12.1% YoY (8.6% in Q1 FY22), slippages moderated to 1.8% (2.54% in Q1 FY22) and credit cost was contained at 1.3% (1.7% in Q1 FY22).
This, coupled with 25% YoY growth in core fee income, supported 18% earnings growth.
Gross non performing asset for the bank came off by 12 basis points QoQ to 1.35% and stage-III assets for HDB Financial Services improved 200 bps to 6.1%.
What surprised negatively:
exposure of Rs 174 billion being restructured under one time restructuring 2.0.
higher than expected QoQ rise of 14% in operating expenses leading to marginally below expected profit after tax.
What gives confidence:
demand resolution is back to pre-Covid-19 levels; recoveries are encouraging.
bank is embarking on project Future Ready and building digital and franchise capabilities to capture growth opportunities.
cumulative provisioning is equivalent to 2.2% of advances against 2.9% of stress pool.
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