HDFC Bank is expected to announce strong profit growth for the fourth quarter of 2021-22, driven by a surge in net interest income and decreased provisions for bad loans, according to analysts. The largest private sector lender in India is scheduled to announce the results of Q4 on Saturday. HDFC’s financial results are watched sharply because it will be the first income after the announcement of the proposed merger with the development of the Finance Corporation Housing (HDFC).
However, after posting a sharp leap on the announcement day of the merger, the HDFC bank shares have submitted all the benefits. After rising 10% on April 4 to ₹ 1,656,80, HDFC Bank shares now dropped to ₹ 1,464.95 (Wednesday’s closure).
According to the Edelweiss brokerage company, HDFC Bank’s net profit is expected to increase by 24% to ₹ 10,183 Crore in January-March 2022 quarter. During January-March 2021 Quarter HDFC Bank has reported ₹ 8,186 crore. Axis Securities expects a 26.8% increase while the Securities box has projected a 19% increase in HDFC Bank’s profit.
Net interest income, the difference between the interest obtained and interest incurred, from HDFC Bank is likely to be supported by healthy loan growth; NIMS to stay stable Qoq while income costs tend to improve. But the lower treasury income to drag non-interest revenues, “the axis said.
On the other hand, “controlled costs to support the growth of operating profit while slippages are expected to moderate QOQ and the quality of assets to increase,” Broker added.
In the year-to-year basis, HDFC Bank is expected to Growth NII 13.7% to ₹ 19,458 Crore while provisions for bad loans likely to fall 19% to ₹ 3795 Crore.
The main monitoring for HDFC Banks includes growth prospects for each segment and comment on the credit card segment, Axis Securities added.
Net interest income, the difference between the interest obtained and interest incurred, from HDFC Bank is likely to be supported by healthy loan growth; NIMS to stay stable Qoq while income costs tend to improve. But the lower treasury income to drag non-interest revenues, “the axis said.
On the other hand, “controlled costs to support the growth of operating profit while slippages are expected to moderate QOQ and the quality of assets to increase,” Broker added.
In the year-to-year basis, HDFC Bank is expected to Growth NII 13.7% to ₹ 19,458 Crore while provisions for bad loans likely to fall 19% to ₹ 3795 Crore.
The main monitoring for HDFC Banks includes growth prospects for each segment and comment on the credit card segment, Axis Securities added.
The Board of Directors of HDFC Ltd. and HDFC Bank at the meeting held earlier this month approved the merger proposal of two leading financial institutions. In accordance with the terms of the agreement, the HDFC Ltd shareholders will receive 42 HDFC bank shares for 25 shares owned. Existing HDFC shareholders will have 41 percent of HDFC banks.
Many analysts welcome the proposed merger. “This merger will create a financial giant, which is still expected to grow by 20% higher and can create better profitability with cost synergy. It is also good news for customers with service consolidation under one entity. RBI has tightened the regulatory framework for NBFC and therefore Pro keeps the Bank and NBFC as a separate entity reduced. It seems that a very good step benefits all stakeholders who are also quite successfully stored under the wraps until the actual announcement, “said Mohit Ralhan, managing partners at TIW Capital Group. (With agency input)
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