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    hdfc bank: HDFC Bank Q1 results: Profit jumps 20%; lender warns future uncertain

    ByRealtrade.news

    7月 18, 2020


    Mumbai: HDFC Bank’s first quarter net profits rose 20 percent driven by a three-fold jump in treasury gains, but the biggest bank by value warned that the future remains uncertain due to fluctuating economic activities because of Covid-19, and a likely behavioural change in people.

    The first big bank to report earnings after the Reserve Bank of India announced moratorium, said defaults and provisions could rise in the coming quarters as business slows down with a shift in the way the consumer behaves due to loss of economic activity.

    “The continued slowdown may lead to a rise in the number of customer defaults and consequently an increase in provisions there against,’’ the bank said. “The extent to which the COVID-19 pandemic will continue to impact the Bank’s results will depend on future developments, which are highly uncertain, including, among other things, any new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact.’’

    HDFC Bank’s net profit rose to Rs. 6,658 crores, from Rs. 5,568 crores a year earlier. Provisions for bad loans and contingencies surged 49 percent to Rs. 3,891 crores, which included a Rs. 1,000 crores for contingencies.

    Indian banks face a shaky few quarters as the RBI extended payment moratorium till the end of August. This has led to many lenders raising their provisions and face an uncertain future on delinquencies. Banks, including HDFC Bank have lined up equity fund raising of as much as Rs. 1 lakh crores this fiscal.

    Its main retail franchise was subdued with pre-tax profit from the retail segment plunging 28 percent to Rs. 2,220, from Rs. 3,067 a year earlier. As retail activity reduced fees and commissions fell 37 percent to Rs. 2,230.7 crore.

    “The continued slowdown in economic activity has led to a decrease in retail loan origination, sale of third-party products, use of credit and debit cards by customers, efficiency in collection efforts and waivers of certain fees,’’ the bank said.

    But treasury gains more than tripled to Rs. 2,505 crores as the movement in bond yields due to the RBI’s slashing of interest rates helped the bank post profits.

    Net interest income, revenues after paying interest for deposits, grew by 18% to Rs 15,665.4 crore from Rs 13,294.3 crore, a year ago driven by a 21 percent rise in loans.





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