Cost reduction measures should provide some cushion. A&P, SG&A etc. Opex/NIM to do better.
NIM in falling rate scenario - IMO this can be interesting to watch - for e.g. FD rates have come down in higher proportion compared to loan rates.( individual observation)
Push to Digitization will help create sustainable levers for opex reductions - mid term.HDFC life has done way better than peers during disruptions- HDFC as group- even at such huge size, is quite nimble to adopt and change!!
MSME NPA picture may not be clear till moratorium end. But yes - they are likely to do aggressive provisioning.
Upcoming IPO of HDBfin - how does this create value to existing shareholders to be seen!!
Invested, added during fall and quite a learning to see swift recovery - a must for core portfolio.
Hdfc bank has an exposure of around 24000 cr to vodafone idea whose survival depends upon AGR issue going on in SC. In case the judgement is not favorable, how bad it can affect HDFC bank?
Has anyone given a thought to it?
That is the Bank’s total exposure to telecom not Vodafone Idea,the majority of the loans are to the top 2 companies that is Jio and Airtel and if I recall correctly the management had mentioned in one of their concalls prior to Covid that they have some bond exposure to Vodafone Idea which is adequately provided for.
Since there is no thread on federal bank and my question is a generic question, posting here. Today federal bank reported Q1. I was looking at the revenue section. Its 2705 crore vs 2606 crore q1 last year. ( So there has been an increase). If I am not wrong, at least 30% of loan book is under moratorium. (At the industry level. no idea about federal bank. But I am sure their customers opted too). So I am wondering how they are able to show a growth here? Does this mean, we have a different revenue recognition policy for loans under moratorium?. I mean they can report it even though the interest is not collected?
discl: no holding in federal/hdfc bank
In my opinion, the bank results need to be compared QOQ instead of YOY as it’s not a cyclical business. There is a mediocre performance QOQ. The bank has not made any provisioning due to Covid.
Expects views invited as I am not an expert.
Disc:Invested
Real impact of Covid will only be known in Q3-Q4 mostly
Should look at QoQ numbers, loan book growth less than 1% (sort of expected but can hardly seeing things improving in Q2 with India’s current coronavirus situation), some stress beginning to appear - PAT is lower. YoY much higher because of Corporate Tax Rate difference of 34% vs 25%
Not sure if this vehicle loans issue can be classified as corporate governance issue. Hope it’s not a case of many hidden cockroaches
I think the statements in the above news report are self contradictory and also vague. It states in the beginning that there was no conflict of interested in later part of of the report it states that there is a Conflict of interest. The bank should have divulged as to what exactly happened in the interest of share holders.
As on 30 June, HDFC Bank’s 9 pc of outstanding loans are under moratorium.
Total outstanding loans are- 10 lakh cr ( aproximately )
So, loans under moratorium would be - 90,000 cr.
Compare this to Bank’s annual profitability run rate of say- 27000 cr.
So…now, one can derive his / her own conclusions.
My take- If the bank’s moratorium book falls below 5 pc over the next 3-5 months, HDFC bank can really come out as a big winner out of this crisis as most PSUs would ( in all probalibity ) practically run out of money to lend ( due much higher bad loans ).
However, if a higher percentage of moratorium book turns bad- shareholders wait could be long.
Comparing PAT QoQ is better but comparing NIM, advances and deposits YoY isn’t bad since they are not affected by corporate taxes. Please correct me if I am wrong here.
Yes, QoQ performance is not good but if you look at the results, a lot of it is because of “Other Income” which according to results filing is attributed to
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. As a result, fees/other income
were lower by approximately ₹ 2,000 crore.
I think it has to be expected due to Covid. Considering that there was a lockdown it’s not bad QoQ performance IMHO.
“He (the successor) has been with us for 25 years, my successor was always in place, at least in my mind,” Puri told shareholders at the bank’s virtual AGM held on Saturday. Seeking to assuage concerns on training and business understanding, he also said the candidate has “learnt very well”. However, he did not name the candidate.
Earlier this year, a media report said the bank had selected the names of internal candidates Sashidhar Jagdishan and Kaizad Bharucha, and Citi’s Sunil Garg as the probable candidates.
He’s retiring in October this year at the age of 70. He is bound to exercise his stock options at some point ofcourse. I don’t think there is much to read in this.
Stock options can be availed and shares can be retained .Does it mean that he is either seeing a better opportunity than this investment or the future does not appear to be bright to support current price or lastly foresees another downside due to pandemic/moratorium losses.
But IMHO it’s significant .
There could be a 1000 probable reasons which there is no point speculating on and diluting the quality of discussion unless there is any evidence that the sale is based on his outlook of near term bank performance.
Anyway, just thinking of it simply - he’s 70, about to retire, and when stock was at all time highs earlier this year his holding was worth 950-1000 crore which crashed all the way to 550 crore in March.
Having recovered 300 crores (read that again…300 crores!) - why wouldn’t anyone want to encash that knowing how volatile markets can be? So I wouldn’t want to read much into this unless there’s evidence of what I said above.
Correct me if I am wrong, but if his options were expiring and he wanted to hold, he would have had to pay the strike price. By selling immediately he can directly get the difference in strike price and market price and this way he doesn’t have to deploy his own cash so seems convenient.
The reason behind almost entire AP stake sell is anybody’s guess unless you are his close friend. Now what we as investors should do.
The stake sale is just a normal routine sale.
Here stock price would just perform in line with bank performance
The stake sale is due to AP sees some issues.
There will be sharp massive fall
Now the probability of getting yourself right is same as getting yourself wrong. There is no data which will tilt probability in favor of any outcome.
So this is a completely speculative situation and an individual has to take his own call whether to be in stock or not as per his methodology. If you think you will take decision when we will get clear picture then by that time stock would have done what it was supposed to do.
During Yes bank people used to comment how can such big bank be in problem when RBI closely monitors it. The picture didn’t get clear until stock fell more than 50%. But everyone knows what happened.
