HDFC Bank Falls After Profit Mises Estimates On Higher Provisioning

HDFC Bank's web revenue in April-June interval rose 16 per cent to Rs 7,730 crore.

Shares of the nation's largest personal sector lender - HDFC Bank - fell as a lot as 3.65 per cent to hit an intraday low of Rs 1,466 on the BSE after its web revenue missed analysts' estimates on the primary quarter of present monetary yr on greater provisions for unhealthy loans as a result of second wave of Covid-19. HDFC Bank's web revenue in April-June interval rose 16 per cent to Rs 7,730 crore versus Rs 6,659 crore throughout the identical interval final yr. The revenue got here in decrease than what analysts have been anticipating as they'd estimated revenue of Rs 8,072 crore, in line with Refinitiv knowledge.

Its provisions for unhealthy loans surged 24 per cent to Rs 4,830.84 crore versus Rs 3,891.52 crore throughout the identical quarter final yr.

"The disruptions following the outbreak, have led to a decrease in loan originations, the sale of third party products, the use of credit and debit cards by customers and the efficiency in collection efforts. This may lead to a continued rise in the number of customer defaults and consequently an increase in provisions there against. The extent to which the COVID-19 pandemic will continue to impact the Bank's results will depend on ongoing as well as future developments, which are highly uncertain, including, among other things, any new information concerning the severity of the COVID-19 pandemic, and any action to contain its spread or mitigate its impact whether government-mandated or elected by us," HDFC Bank stated in an trade submitting.

HDFC Bank's web curiosity earnings or the distinction between curiosity earned and curiosity expended rose 8.57 per cent to Rs 17,008.96 crore versus Rs 15,665.42 crore in the identical month final yr.

The development of elevated slippages, or the contemporary addition of unhealthy loans, on account of COVID-19 will likely be seen in different banks too, ICICI Securities stated in a be aware, including that the lenders would comply with go well with in creating disruption buffers.

As of two:17 pm, HDFC Bank was high Nifty loser, with its shares buying and selling 3.41 per cent decrease at Rs 1,470, underperforming the Sensex which was down 1.16 per cent.