InvestorQ : Is it true that the NPAs of HDFC Bank have widened in Q1? What could be the impact of these NPAs on the stock price of HDFC Bank?
indhumathi Sayani made post

Is it true that the NPAs of HDFC Bank have widened in Q1? What could be the impact of these NPAs on the stock price of HDFC Bank?

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6 days ago
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Even as HDFC Bank reported good growth numbers on Saturday, one area of concern was the gross NPA increasing sharply and resulting in higher provisioning. The NIM was almost flat at 4.1% even as NII expanded by 8.6% in the Jun-21 quarter. However, the big story was on the gross NPA front. For the Jun-21 quarter, HDFC Bank made provisions to the tune of Rs.4,831 crore compared to Rs.3,892 crore in June quarter last year.

One outcome was that this led to higher credit costs by 3 bps from 1.64% to 1.67% in the Jun-21 quarter on sequential basis. On a yoy basis, the cost of credit rose from 1.54%. It was clearly COVID 2.0 that triggered this higher level of provisioning. Gross NPAs for the Jun-21 quarter stood at 1.47% as compared to just 1.32% in the sequential quarter. Even net NPAs in the sequential period were up from 0.40% to 0.48%.

In Jun-21, the total provisions were 146% of gross NPAs. Another risk was that the higher income was also partially driven by 175% yoy increase in forex and derivatives income at Rs.1,199 crore in the Jun-21 quarter.

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