HDFC Bank Q3 profit up 18%, here are highlights of analyst call

Proforma annualised slippage ratio for the current quarter is at 1.86 percent, GNPA stands at 1.38 percent while the proforma NNPA stands at 0.40 percent. Interest reversal on proforma slippages has been done. Proforma GNPA would include a part of restructuring. Restructuring, as per the RBI resolution framework for COVID- 19, is at 0.5 percent of the total advances. The restructuring that has been done is as per the customer's request. There are few corporate restructuring cases but they have been included in the restructuring figure. The cost to income ratio is expected to be back to 38-39 percent in the short term but in the medium term, management intends to bring it down back again. The wholesale portfolio continues to do well. Most of the growth is coming from well-rated public and private-sector enterprises. The average rating of the portfolio has remained steady at around 90 percent of the externally rated book and above. There is not much difference between the actual and proforma NPA numbers in the wholesale book. In the SME portfolio 30+ DPD has shown improvement since September and FITL is 0.74-0.75 percent, which shows the strength of the book. Stress in the book is as per the bank's stress test at around 2.3 percent. The delinquency trends have shown improvement across all buckets. In the retail portfolio, the demand resolution is at 97 percent versus pre-COVID level of 98 percent. Management believes that it will get to pre-COVID levels soon. Collection resolution is improving month on month. Recovery on written off accounts is also doing well. During the quarter, the bank sold some assets in the retail portfolio but any financial impact of that has already been taken. In the retail book, there has been double-digit sequential growth in disbursement. The bank is seeing a bullish growth rate in retail working capital, home loan, auto loan, LAP, etc. Gold loan franchise has been witnessing a good growth rate and looking at that, the bank is eyeing a physical distribution with liability branches to grow going forward. The growth in home loans is supported by the reduction in stamp duty. In the microfinance business, the normal run-rate of business is expected to resume from January and the bank is optimistic about it. Disbursements under the Emergency Credit Line Guarantee Scheme 1 (ECLGS 1) as of January 15, 2021, are Rs 22102.68 crore across 1,19,599 customers and in ECLGS 2, the bank disbursed Rs 579.16 crore across 59 customers. The bank registered 20 percent YoY growth in saving account acquisition and 15 percent in current account acquisition. During the quarter, the bank opened 2 million liability relationships. More than 2.3 lakh CASA accounts were opened during the year. Cards sales volumes were up 32 percent QoQ while merchant acquisition volumes were up 20 percent. The bank's average LCR for the quarter was 146 percent. Excess liquidity positions affected the current NIM by around 15 bps Out of the fees and commission income, retail constituted 94 percent and wholesale 6 percent. The bank expects to add 100 more branches by the end of the year.