HDFC Bank up over 2% on December quarter operational performance

Shares of HDFC Bank climbed 2.5 per cent to Rs 1272 apiece on the BSE on Tuesday after the largest private sector lender reported strong business growth in the December quarter (Q3FY20).

The bank’s total advances grew by 20 per cent year on year (YoY) to Rs 9.34 trillion in Q3FY20, driven by festive season demand. Total advances stood at Rs 7.81 trillion in Q3FY19 and at Rs 8.97 trillion in September 2019 quarter (Q2FY20).

Deposits for HDFC Bank stood at Rs 10.67 trillion as of December 31, 2019 growing by 25 per cent compared to Rs 8.52 trillion as of December 31, 2018. The bank’s current and saving account (CASA) ratio stood at around 39.5 per cent against 40.7 per cent in a year ago quarter.

In a statement to the exchanges, HDFC Bank said, “during Q3FY20, the bank purchased loans aggregating Rs 4,258 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation Limited.”

“HDFC Bank’s business growth momentum was strong in the December quarter, despite the slowing macro environment. Superior loan profile has enabled HDFC Bank to consistently gain market share across retail segments (personal loans, business banking, credit cards and auto loans), while strong capitalization and liquidity levels will help sustain this momentum over the next few years,” Motilal Oswal Securities said in bank update.

Stable margins, a robust fee income profile and strong control on operating leverage are likely to drive an improvement in the return ratios, it said.

In Q3FY20, HDFC Bank underperformed the benchmark index by climbing 2.46 per cent as compared to Sensex's 7.69 per cent gain during the same period.

At 9:57 AM, the stock was trading 2.07 per cent higher at Rs 1266.90 as compared to 1.26 per cent gain in the benchmark S&P BSE Sensex. A combined total of 3.05 million shares have changed hands on the NSE and the BSE so far.