Bank loan

HDFC Bank – Changing Loan Mix to Boost Net Interest Margin Expansion : Nirmal Bang

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HDFC Bank Ltd. announced a stable quarter with net profit in line with expectations. Loan growth was strong across all segments, with the overall loan mix remaining broadly unchanged.

Commercial and rural banks, which have been a focus area, showed the strongest growth (~30% YoY). However, the performance of net interest income (up 13% YoY) was slightly below expectations, as yields fell a further 12bps QoQ, due to strong growth in secure retail and mid-quarter QoQ growth in the enterprise segment.

HDFC Bank continues to guide margin improvement as loan mix shifts in favor of higher yielding segments.

Retail commission revenue growth was moderate due to lower payments/credit card fees. On a stable basis, commission revenue is expected to grow 15-18% year-on-year.

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