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HDFC
Bank , the country’s second largest private sector lender, is expected to
continue to report stable earnings for October-December quarter.
Net interest income, the difference between interest earned and interest
expended, may increase 21.3 percent to Rs 6,911 crore from Rs 5,700 crore on
annual basis.
Analysts expect fee income to grow 15-20 percent, aiding profitability. Fee
income was 70 percent of other income and was up 21 percent in Q2 year-on-year.
HDFC cut base rates by 70 bps since April to 9.30 percent.
Analysts feel advances may continue being above industry level due to retail
business. Advances grew by 28 percent Y-o-Y in Q2 with retail up 29 percent.
They expect gross non-performing loans to remain stable, which was 0.91 percent
as of Q2FY16.
Key factors to watch out for would be sale of loans to asset reconstruction
companies, operating expenses and commentary on retail portfolio especially on
commercial vehicle/commercial equipment.
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