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● HDFC Bank’s 2Q FY12 profit growth was in line with expectation
at ~31% YoY. Loan book growth at ~7% QoQ was well ahead of
the industry growth rate of ~3%. Consumer loan book growth was
a strong 34% YoY.
● The branch network increased to 2,150 (up ~22% YoY) and
savings account base grew 16% YoY. However, the impact of the
rise in rates was visible in current account deposits growing only
~2% YoY and consequently the CASA ratio moderated to 47%
from 49% in June 2011 and NIMs were down 10 bp to 4.1%.
● Asset quality continues to be robust with gross NPLs being stable
at ~1% of loans (~3% QoQ) and with the bank maintaining 80%
NPL coverage, provision expenses were down ~20% YoY.
● With a strong funding base and comfortable capital position
(11.4% Tier 1), we expect HDFC Bank to be among the fastest
growing private banks this year. This and the robust asset quality
should help the bank sustain its premium 18x earnings and 3.3x
FY13E book. Retain OUTPERFORM.
Operational performance continues to be robust
Loan growth during was a strong ~7% QoQ driven by the retail
segment (+11% QoQ). Within the retail portfolio, CV loans grew by a
healthy ~25% QoQ. YoY retail loan growth of ~34% helped the bank
to report strong ~20% YoY loan growth. Fee income keept pace with
the loan growth and grew 20% YoY, helping the bank sustain a
healthy 1.6% ROA. ROE improved to ~18% (~17% in FY11) and we
expect this to reach ~19% by the year end.
Rising rates led to current account deposits growing by just ~2% YoY
and the CASA ratio moderating to ~47% from ~49% from June-end.
Consequently NIMs were also down 10 bp QoQ. Capital adequacy
was a comfortable 16.5% (Tier-1 ratio was 11.4%).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● HDFC Bank’s 2Q FY12 profit growth was in line with expectation
at ~31% YoY. Loan book growth at ~7% QoQ was well ahead of
the industry growth rate of ~3%. Consumer loan book growth was
a strong 34% YoY.
● The branch network increased to 2,150 (up ~22% YoY) and
savings account base grew 16% YoY. However, the impact of the
rise in rates was visible in current account deposits growing only
~2% YoY and consequently the CASA ratio moderated to 47%
from 49% in June 2011 and NIMs were down 10 bp to 4.1%.
● Asset quality continues to be robust with gross NPLs being stable
at ~1% of loans (~3% QoQ) and with the bank maintaining 80%
NPL coverage, provision expenses were down ~20% YoY.
● With a strong funding base and comfortable capital position
(11.4% Tier 1), we expect HDFC Bank to be among the fastest
growing private banks this year. This and the robust asset quality
should help the bank sustain its premium 18x earnings and 3.3x
FY13E book. Retain OUTPERFORM.
Operational performance continues to be robust
Loan growth during was a strong ~7% QoQ driven by the retail
segment (+11% QoQ). Within the retail portfolio, CV loans grew by a
healthy ~25% QoQ. YoY retail loan growth of ~34% helped the bank
to report strong ~20% YoY loan growth. Fee income keept pace with
the loan growth and grew 20% YoY, helping the bank sustain a
healthy 1.6% ROA. ROE improved to ~18% (~17% in FY11) and we
expect this to reach ~19% by the year end.
Rising rates led to current account deposits growing by just ~2% YoY
and the CASA ratio moderating to ~47% from ~49% from June-end.
Consequently NIMs were also down 10 bp QoQ. Capital adequacy
was a comfortable 16.5% (Tier-1 ratio was 11.4%).
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