HDFC Bank declines as sticky loans rise in Q1

HDFC Bank was down 0.38% to Rs 1,227.45 at 12:53 IST on BSE after the bank's gross non-performing assets increased to Rs 4920.89 crore as on 30 June 2016 compared with Rs 4392.83 crore as on 31 March 2016 and Rs 3652.23 crore as on 30 June 2015.

Meanwhile, the S&P BSE Sensex was down 121.23 points or 0.43% at 27,794.66.

On BSE, so far 82,000 shares were traded in the counter as against average daily volume of 1.08 lakh shares in the past one quarter. The stock was volatile. The stock rose as much as 0.6% at the day's high of Rs 1,239.50 so far during the day, which is a record high for the counter. The stock lost as much as 0.72% at the day's low of Rs 1,223.15 so far during the day. The stock had hit a 52-week low of Rs 928.80 on 29 February 2016. The stock had outperformed the market over the past one month till 20 July 2016, advancing 5.09% compared with Sensex's 3.9% rise. The scrip had also outperformed the market in past one quarter, gaining 12.36% as against Sensex's 8.02% rise.

The large-cap bank has equity capital of Rs 507.01 crore. Face value per share is Rs 2.

HDFC Bank's ratio of gross non-performing assets (NPAs) to gross advances stood at 1.04% as on 30 June 2016 compared with 0.94% as on 31 March 2016 and 0.95% as on 30 June 2015. The ratio of net NPAs to net advances stood at 0.32% as on 30 June 2016 as against 0.28% as on 31 March 2016 and 0.27% as on 30 June 2015.

The bank's net profit rose 20.2% to Rs 3238.90 crore on 17.1% growth in total income to Rs 19322.60 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours today, 21 July 2016.

The bank's net interest income (NII) rose 21.8% to Rs 7781.40 crore in Q1 June 2016 over Q1 June 2015, driven by average assets growth of 20.2% and a net interest margin (NIM) of 4.4% in Q1 June 2016.

The bank's provisions and contingencies rose 19.05% to Rs 866.70 crore in Q1 June 2016 over Q1 June 2015.

HDFC Bank announced after market hours yesterday, 20 July 2016 that S&P Global Ratings (S&P) has affirmed its 'BBB-' long-term issue ratings on the senior unsecured bonds issued by the Bahrain branch of the bank. S&P has also removed its ratings on these bonds from CreditWatch which were earlier placed with Negative implications.

It may be recalled that in February 2016, S&P had put the bonds issued by HDFC Bank, Bahrain branch on CreditWatch with Negative implications consequent to a downgrade in the rating of Bahrain.

The latest development from S&P comes in the aftermath of HDFC Bank modifying its existing structure of the bonds. Under the revised structure, if any event materializes thereby restraining the bank's ability to service the bonds from Bahrain branch, the bank will service the bonds from any branch in India or from the Hong Kong branch.

HDFC Bank is one of the leading private sector banks in India.

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