HDFC Bank will be watchful in pricing and funding loans: CFO Vaidyanathan
HDFC Bank will be circumspect about the quality of wholesale and retail loans and how they choose to price. The bank’s chief financial officer Srinivasan Vaidyanathan hinted that intense competition was bringing down profitability on wholesale loans.
“On the wholesale category, we have seen that credit demand is high but the rates are benign,” said chief financial officer Srinivasan Vaidyanathan. “The spread over government securities is thinner and competition pushes it even down. We want to be circumspect in how we price and choose (loans). In the retail segment, we are leaders on mortgages but on the unsecured side, we have seen regulators talking about being cautious of credit quality. We are cautious of the credit and calibrate accordingly.”
The lender said advances grew 52.6% on year in the June quarter driven by retail loans, which more than doubled. Corporate and wholesale loans grew 18.7% on year. Total loans stood at Rs 24.8 lakh crore.
The lender reported a 35% rise in profit to Rs 16,175 crore in June quarter from the year ago, helped by lower provisions and strong net interest income, exceeding the Rs 15,652 crore Bloomberg estimate.
The bank had posted a profit of Rs 11,952 crore in the year before.This is the first time that HDFC Bank earnings have factored in the numbers of the erstwhile Housing Development Finance Corp. The two merged on July 1, 2023.
Deposit growth was slower than loan growth with liabilities rising 24.4% over last year to Rs 22.83 lakh crore, underscoring a broader concern of
