Oct 01, 2013, 01.32 PM | Source: CNBC-TV18

Confident of growth; see margins in 4.2-4.5% range: HDFC Bk

Aditya Puri of HDFC Bank Puri expects margins in the range of 4.2-4.5 percent. However, there could be some minor impact on margin which would be made up in the rest of the year," he adds.

Our margins range in the 4.2-4.5 percent and that remains intact. Our NPLs range in 1-1.2 percent, that remains intact

Aditya Puri



Aditya Puri, MD and CEO, HDFC Bank is hopeful that the bank is likely to maintain its margins in the range of 4.2-4.5 percent. However, cautions of minor impact on margin, which would be made up in the rest of the year.

Speaking to CNBC-TV18’s Latha Venkatesh, he said that the private sector expects its growth to continue given the fact that it does not have any loan growth pressures.

"Our NPLs range in 1-1.2 percent, that remains intact and we have a substantial operating leverage, because we have gone into rural India and opened almost 45 percent of our branches there in the last two years and taken our entire product range there. So, we are absolutely confident of growth," he elaborated. 

Meanwhile, he expects the 10-year bond yields to settle in between 8.4-8.6 percent range, because the RBI will focus primarily on controlling inflation and that has to be built into the pricing.

Below is the verbatim transcript of Aditya Puri's interview on CNBC-TV18.

Q: How much points will you give first monetary policy statement on a scale of 10?

A: I will be a nut not to give a 10.

Q: What does it mean basically to a bank? Does it mean a higher cost of money because repo rate has gone up?

A: The difference from where I can see your question is coming from and the way I look at it. I look at it over a period of time. So, I would rather define where I see the policy taking me and the economy than just saying what happens to this repo rate because that rate can also change depending upon the state of the economy.

I am very happy with the policy for two reasons. One, it clearly sets out the basis on which policy will be decided and what is the end result. So inflation is important, growth is important and the rupee stability is important.

It also says that whatever measures were taken in July to stem the movement of the rupee based on favourable trends continuing will be unwound. The disruption came with the July measures.

First thing he has done is on the short tenor 75 basis points down, this will bring the call rate down, the certificate of deposit (CD) is already down to 9.5 percent, it will bring the CD rate further down. It will bring the rates in terms of bulk deposits down which is a large proportion, it won't happen overnight, so don’t ask me when will you lower your base rate because there is an issue in transmission.

He had clarified that liquidity will also come as the foreign currency non-residential (FCNR) deposits keep coming in and the regular monetary policy will be restored once he has confidence in terms of the actual functioning of the economy. So, I don’t think we could have asked for more.

Q: What do you think the cost of money will look like? Is it likely to inch up or lower?

A: In the short run it will inch up a bit. In a six month horizon, it will go down.

Q: What has been your response in your bank to the FCNR (B) product? Is it a decent response and do you see it increasing by November?

A: Yes, absolutely. Any product that we introduce is four days old. It takes a while for it to gather momentum. But this is the best opportunity NRIs are going to get in their life. Where the hell can you take almost a country risk or a bank risk and depending upon the number of times they leverage you get between 16 and 18 percent. So, there will be lot of money coming in there.

HDFC Bank stock price

On December 01, 2015, HDFC Bank closed at Rs 1081.40, up Rs 5.45, or 0.51 percent. The 52-week high of the share was Rs 1127.90 and the 52-week low was Rs 916.45.

The company's trailing 12-month (TTM) EPS was at Rs 44.26 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 24.43. The latest book value of the company is Rs 245.79 per share. At current value, the price-to-book value of the company is 4.40.

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READ MORE ON  Aditya Puri, HDFC Bank, RBI, repo, base, FCNR
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