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Loan growth for HDFC Bank is robust, NII growth expected to remain robust, says Reliance Securities

Updated : October 20, 2018 17:46:39 IST

HDFC Bank reported its Q2FY19 numbers. Net profit is at Rs 5,005.7 crore versus CNBC-TV18’s poll of Rs 5,024.1 crore. Ashutosh Mishra, senior analyst at Reliance Securities shared his views and outlook.

“Results are in-line with our expectations on both operational as well as asset quality front. So marginal increase in the gross non-performing asset (NPA) is quite given in the current scenario. The key thing to watch is that continuously they are delivering good loan growth, which is percolating down into the earnings for the banks in subsequent quarters,” he said.

“Partially raising of the equity has also contributed in net interest income (NII) but the bank is continuously raising good growth on quarter-on-quarter (Q-o-Q) basis from the last five-six quarters taking advantage of the current scenario in the banking industry as a whole. So that has now quite significantly started contributing into the NII growth of the bank,” he added.

“Because loan growth is quite robust, the NII growth is expected to remain robust with good margins which bank is mentioning at this point of time,” said Mishra.

“There is enough provision from the bank. They have a sufficient cushion at this point in time. They have adequate capital in place and growth opportunities are there in front of them, so they will continue to grow at a very robust pace in the given scenario,” he further mentioned.

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