One of the risk Is also dhfl…
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The cost to Income is going to be high for some quarters as branches are setup. CASA addition is expensive too with higher interest payouts.
veryfirst Campaign launched
https://www.idfcbank.com/IDFC-FIRST-Bank-Always-You-First.html
Its showing its marketing muscles now expect more CASA now
Disc; Invested
Cost of CASA is high but it is 250 basis point least than existing cost of fund. It is gradually replacing high cost funds with less cost funds.
DHFL loan is really a problem and I see high chances of becoming it NPA.
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The way their marketing and back office team works for CASA they need complete overhaul.
This is my personal experience. On 15 th April around I had filled forms for opening of new accounts . I called them again, filled form again, wrote email to their higher office. They called me twice in this 40 days but still no one has came from their side to open account.
This way they will never get CASA.
For success of any bank for CASA , their should be branch in major locality. Here in Mumbai itself from my area one branch is around 4 km and 2nd around 13 km away. Why should I open account their if I am doing business and have to deposit cheque or cash daily ? It’s not feasible to travel far for this.
They can get that type customers who are professional and tech savvy and do most of transaction online. But don’t forget the same customer are smart and they don’t let funds remain idle in savings account for long. Traditional old business people and clients will only keep money in CASA for long as they are reluctant to change the banks for few additional gain . And to get such customers u should have branches in most of areas.
So whenever some one argues that idfc will be next hdfc or any other bank , he should ask himself “ is he ready to shift account in idfc ? Is it convenient for him ? “
Just my observation. I don’t have any investment in idfc … I am opening account just for higher interest in CASA.
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And by the way if I had called hdfc or Kotak they would had sent their representative to my home in a day and had opened account in 3 days…
That attatitude also makes great bank…
i dont know i just used this link: took 4 mins
https://secured.idfcbank.com/content/idfcsecure/en/AadharConsent.html
opened it online
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It’s for 60 days limited service accounts. after that one has to compulsory go to nearest branch for verification.
So other option is to call them personally and get it verified at the time of opening only
yes sir they will visit me at my home
Looks like they have kick started the marketing…
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Yes… I think Mr. Vaidyanathan mentioned 1,000 cr exposure in NBFC i.e. DHFL most probably. Out of this 150 cr provision is already made last quarter. Now, additional 600 cr. or 850 cr. provision can be made depending upon 75%/100% rule. The stock went down from 55 to 45 bcoz of 425cr provision, so now this provision can bring share price down by further 10 rupees…
It’ll be a fantastic buy at 35. Will add more at 33-35.
Disc: Invested. Top holding.
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DHFL would be at 598 cr -
https://forum.valuepickr.com/uploads/default/original/3X/2/4/24fe4df10cd72afbc82909ef9be31c2c0246cc15.pdf
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Vaidyanathan also suggested that these are also backed by good assets… I also expect full provisioning. This will also be a serious tough time for investors as they also have exposure to reliance capital. Management should have exchanged the loans given to DHFL with the retail loans of DHFL, This would have been a best deal. DHFL also has strong assets, however due to downgrade they will surely declare as NPA.
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How long would it for post merger gestation period to be over?
3% of networth is the Bank’s exposure to DHFL bonds.
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DHFL started paying
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You are correct in some sense on ‘why a Indian Bank or Canara bank customer should switch to IDFC first given larger distances?’. Let me try to answer in couple of ways…
i) People visiting banks are going down day a by day. Cheque transactions have gone down, reason to go o branches have gone down. 5, 10 15 years back, people go to bank to transact their banking needs. Now most people go to bank only when they are not able to transact their basic needs.
ii) Also, from IDFC first perspective, they have to start somewhere. All these ICICI & HDFC of these world started somewhere without branches for 10s & 100s of kms. 1 year Back, Chennai had 3 IDFC bank branches. Now, it has 8 branches and counting. All the new branches, in my opinion has been strategically opened in most posh suburbs, most close to each other.
But as saying goes, proof is in the pudding. IDFC first will have to show improved CASA in coming quarters & years.
Disc : Invested little. Waiting for dips to add more
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I can say for Bangalore that they got their branches at the best possible locations.
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