HDFC Bank to keep margins at current levels
HDFC Bank managing director Sashidhar Jagdishan said the lender «will not be chasing growth for the sake of growth» and «will be delighted even if the margins remain at the current levels». Addressing analysts on Saturday, soon after the bank declared its fourth quarter results, he declined to give any guidance but said the bank will have a positive bias towards growth over the next two to three years. He urged investors to be patient as the bank is going through a transition period following the merger with parent institution Housing Development Finance Corporation last July.
Comparing HDFC Bank's transition period to the construction of the coastal road (in Mumbai connecting Marine Drive to Worli), he said: «It's like the coastal road when it was getting built; we were all sort of having a lot of problems with it, we were trying to navigate our traffic around it, but now when it's up and running you know people are so delighted.»
He hinted that HDFC Bank will have similar benefits of coastal road post-transition: «We will have our day when the proportion of borrowing comes down. We will have enough momentum in terms of funding, which we can unleash in terms of growth. Even during this period, as I said, we will maintain stability in our profitability metrics...we will try and ensure that we have a positive bias and trajectory over the next two to three years.»
HDFC Bank's margin was 4.1-4.3% pre-merger and 3.4-3.6% after the merger with HDFC.
Although the private lender's shares are down 8% in the past year,
