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News: HDFC Bank reported mixed performance wherein business growth remained healthy, however, margin remained steady against expectation. Sequential growth in advance came in 4% with continued focus on SME and retail segment. While 4% QoQ growth in other income and 3.6% uptick in opex remained in-line, steady margins despite deployment of investments point towards competitive intensity on liabilities. Earnings growth came at 2.5% QoQ at ₹ 16372 crore, owing to elevated credit cost at ₹ 4216 crore. Asset quality remained steady with GNPA declining by 8 bps QoQ to 1.26%.
Views: Management maintains its focus on increasing distribution capabilities and customer accretion to shore up the liabilities mix. However, challenges in terms of elevated LDR ratio and lower LCR persists which remains watchful.
Impact: Negative