What I also don’t like is the branches of idfc first. They are big, posh. Just look at hdfc bank, they are small and adequate. Why would a auto Wala visit idfc first branch even after looking from outside. Also most of the time the branches are empty of idfc first.
Disc: Invested on both.
I visited one branch in Bangalore and footprint is very small around 650 sq ft. Something like start up kind of environment. All bank employees on one desk. Separate teller. They treat customers like guest - Offered water and option for tea/coffee. I got some information on business and branch manager gave some numbers and looks like they are doing well. I have opened accounts for myself, wife and kids. They have good service including domestic lounge access. At this time I am betting on Mr. Vaidyanathan.
Disc: Holding and adding in SIP mode.
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Indusind has declared DHFL as fraud so no recovery expected from this side for idfc first and provision to be done 100% if not done yet…
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They have already provided for 75 % . So should not be an issue.
yes but 100% provisioning would dent the profits which would further delay its rerating.
RBI team is looking into asset liability mismatch.
DHFL Bonds are quoted at around 20 to 25%.
There should be some recovery and should not be less than 25%.
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IDFCFIRST Bank has opened 74 branches in Q3 2019.
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Could you tell the source of the above information ?. I have been following the RBI website to track the new branches added
I too have very good experience with the bank. An employee travelled 85km and came to open an NRE account and the response is very good.
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But all these make the business for bank expensive and is not a measure of efficient banking
IDFC bank has close to 2000 cr exposure to Vodafone. That is almost 2% of book. Or does this sit in IDFC book. Not sure.
This will knock off 20% of book value if this needs to be written off(most likely scenario) assuming 10x leverage.
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^^
“IDFC’s Rs 2,000 crore exposure is all in bonds/debentures.”
Whereas the total funded exposure towards Telecom was arnd 1500 cr as per q2 results presentation of the bank. (Non-funded another 3800 cr.)
I don’t think Vodafone would need to be completely written off. Banks are getting pretty good amount from RCOM exposure. This is a much better company. Proabably will sell for much greater amount especially if it is sold off as a running concern.
AGR will fall under operating dues. Govt wouldn’t get it anyways.
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Question is what will be the impact on
Bank branch conmectivity (110000 branches )
ATM connectivity (200000 ATMs )
POS machines that runs on mobile
Enterprise links
Enterprise data center and location office connectivity
Productivity loss while 300-400 million subscribers migrate to other operators services
Which other operator has capacity to accommodate such additional subs base and if not how long they will take to build capacity to accommodate it .
These are all practical issues if voda shut operations abruptly without smooth transition which is not easy and can go on for year or two minimum
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Looks like huge provisioning may still continue for next 2 quarters
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Was there a con call after the results? What is this based on?
Mixed bag results. Not sure they need to be so aggressive with Vodafone.
The traction in retail deposits is good but the quality of the book is circumspect.
Invested Indirectly.
Actually the Bank is super conservative with the provisions. Am not sure if any other Bank has taken any provision for Vodafone in this quarter. At 50%, I think the provisions for the group are more or less done, rather any relief to Voda-Idea (very likely in my opinion) would act as a positive surprise for the Bank.
Apart from that, I think all the operational parameters, vis-a-vis NIMs, CASA growth, retail focus and growth seems good. Its unfortunate that the legacy book of IDFC/pre-merged IDFC Bank continues to have a significant impact and hampers the real change that is happening. Every quarter, a new issue wrt to infra/whole sale lending book comes up, negating the positives over the quarter.
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Good part of the result is improving CASA, NIM, increasing Retail loan book, stable NPA, prudent risk management.
Bad part:- continuous provisions(not in management’s hand as dhfl, vodafone, sical logistic and bad economy came out of blue) , decreasing book value and CRAR.
Expecting them to soon launch credit card business in this quarter
Have to look at MSMe, as MSME cmay turn bad if economy doesnt turn around soon
Invested may add more in near future
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Somehow I get the feel that Vaidyanathan hasn’t been proactive enough to address the toxicity of the corporate book he was handed over by Dr Lal. Quarter after quarter same story about hundreds of crores being written off …and he smartly deflects all questions around this bad book to the rosier stuff around NIM expansion Retail growth and CASA … all good … but as a whole it’s leaving a frustrating experience as the bank realistically is quite a few quarters aways from being in the black. And of course with the bloated equity …there has to be some serious questions around his Halo…
in a recent post @basumallick had asked few wonderful questions and I think investors should atleast ponder over those … who told becoming the next HDFC bank was easy ?
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