HDFC Bank sees robust business growth in Q2 amid merger, reappoints CEO By

HDFC Bank sees robust business growth in Q2 amid merger, reappoints CEO By

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HDFC Bank, in anticipation of its Q2FY24 results, experienced a slight dip in its shares to Rs 1,520.5 each on Monday. This drop reflects market anticipation and investor caution following the bank’s merger with HDFC, as well as concerns over a potential contraction in Net Interest Margin (NIM) due to excess liquidity.

The bank announced a YoY increase of 57.7% in gross advances to Rs 23.54 lakh crore and a 30% growth in deposits to Rs 21.73 lakh crore by the end of Q2-FY24. The retail loan book also saw a surge by 85% over the previous quarter. Kotak Institutional Equities anticipates a marginally higher gross Non-Performing Loan ratio and an increase in provisions to Rs 3,299.5 crore.

Analysts from Motilal Oswal Financial Services and ICICI Securities forecasted YoY growth in Net Interest Income (NII) and net profit but expect a NIM contraction in Q2-FY24. Emkay Global predicts that the regulatory effects of the merger will impact margins and profitability.

Further, it was announced that Sashidhar Jagdishan will continue his role as CEO of HDFC Bank for another three years starting from October 27, 2023 to October 26, 2026. Over the past year, HDFC Bank’s stock has gained 7% on the National Stock Exchange.

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