HDFC Bank: Q2FY23 Result Update
18-10-2022

HDFC Bank Ltd
Market Cap  804,548 Cr
CMP  1,447
P/B  3xFY23E

Results

(INR Cr)

YoY Growth

Comments

Advances

14,79,893 Cr

23%

Healthy loan growth across segments

Net Interest Income

21,021.2 Cr

19%

NIM improved to 4.1% by 20bps, due to50bpsincrease in loan yield, reduced by 30 bps increase in cost of funds.

Net Profit

10606 Cr

20%

Bank benefitted from yield repricing, Fee income increased by 17% YoY growth but was offset by300 Cr. treasury losses.

Click here for 10 year X-ray

  • Advances have grown across all segments, commercial and rural banking grew 32% YoY (highest), followed by Corporate (27%) and Retail (20%) YoY.
  • CASA ratio continued to decline for the secondconsecutive quarter from 48% (down 300 bps) to stand at ~45%. Lower CASA can lead to increase in cost of funds.
  • Asset quality improved as Gross NPA ratio (1.23%) and net NPA ratio (0.33%) for the bankwere lower marginally higher vs. previous quarter GNPA (1.26%) and NNPA (0.32%)
  • Profits before tax from retail business (307,750 Cr) is still below peak level,while the corporate/wholesale book profitability generates 3X profits (922,187 Cr) as retail, which implies that the wholesale book has become important for the bank’s earnings stability and lower yield on these loans than retail.
  • Operating expense grew 21% YoY, led by similar growth in both staff and non-staffexpenses. Significant ramp-up in retail loan growth will increase costs.


 

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