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HDFC Bank NPLs, in worst case, seen at 2.08%; to grab 6-7% market share in rural, semi-urban areas: Top executives

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In the worst case scenario, HDFC Bank’s non-performing loans (NPLs) may go up to the sub-global financial crisis level of 2.08 percent from the current level of 1.36 percent, two top executives said in a conference call with Macquarie.

HDFC Bank NPLs, in worst case, seen at 2.08%; to grab 6-7% market share in rural, semi-urban areas: Top executives
In the worst case scenario, HDFC Bank’s non-performing loans (NPLs) may go up to the sub-global financial crisis level of 2.08 percent from the current level of 1.36 percent, two top executives said in a conference call with Macquarie.
However, they said NPL level will be below their worst case of global financial crisis level and despite 10 percent of loan book under moratorium, the bank is confident of containing NPLs.
Sashi Jagdishan, Group head and strategic change agent, and Srinivasan Vaidyanathan, CFO of the bank said it will cater to top 20-25 percent customers in semi-urban, rural areas and further 6-7 percent of loan market share is up for grabs without diluting risk standards.
Semi urban and rural will be a large market opportunity for financial services and HDFC Bank by being an early entrant has a large runway, they added.
The loan deposit ratio in rural markets is just 30-35 percent and it is a growing market – which makes it a very attractive market, they explained.
Salary credits have already reached at 98 percent of pre-COVID levels so they believe there could be some problems in 2 percent of customers.
“50-60 bps of COVID/floating/contingent provisions created sufficient as of now. Will undertake more accelerated recognition of NPLs, provisioning if needed in filming quarters.”
Earlier, the bank said Sashidhar Jagdishan will be its next CEO. Key agendas for Aditya Puri's successor will be to scale up digital ambitions, they pointed out.
“One of the key agendas for the incoming CEO will be to scale up digital ambitions and create an ecosystem they can monetise.They are trying to create a digital eco-system and cross sell like Ping An – it will be a 2-year journey of creating a bank within the bank for their customers,” they explained.
On new current accounts, they said the bank will take neutral approach – "will lose some and gain some".
On Rosen lawsuit issue, they said there is no lawsuit as of now. Earlier in the week, US-based Rosen Law Firm had said an investigation of potential securities claims on behalf of shareholders of HDFC Bank following allegations that the bank may have issued misleading business information to investors.
“Rosen law firm trying to see if it can get plaintiffs to make a case. Management is confident that there has been no wrongdoing at all.”

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ITC212.40 5.40 2.61
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SBI Life Insura1,050.45 24.45 2.38
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CompanyPriceChng%Chng
ICICI Bank676.65 20.85 3.18
ITC212.35 5.30 2.56
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