HDFC Bank's Bad Loans

On the net interest income (NII) front, analysts remain divided and see the growth between -7.6 per cent and 9 per cent Y-o-Y.

Country's largest private sector has indicated that it would grow its advances at a slower pace than deposits

The net interest income of the lender rose 12.6% in Q4FY21 to Rs 17,120 cr

The June quarter was passed off as an aberration for HDFC Bank's asset quality. However, it appears that the spell on its asset quality may not vanish as in a rush. Gross non-performing assets (NPA), which have been on the rise lately, increased even in September quarter (Q2), making it six straight quarters of rising in bad loans. Gross NPA was seen higher by 52 per cent year-on-year in Q2 to Rs 7,703 crore. Consequently, gross NPA ratio too rose from 1.04 per cent a year-ago to 1.26 per cent in Q2, though net NPA ratio was kept in check (0.43 per cent).Much of Q2's pain came from a specific loan account currently under Reserve Bank of India (RBI) review. The borrower who is believed to be a corporate client has remained a standard account thus far for HDFC Bank. However, RBI is in the process of ascertaining if this account should be categorised as NPA. Therefore, as a prudent measure, HDFC Bank has made a contingent provisioning towards this account, thus taking the overall ...