HDFC Bank
HDFC Bank delivered yet another quarter of consistent performance
on the bottom line front, with a growth of 30.1% yoy. On the operating front,
while the growth in NII came in relatively lower at 20.6% (similar to last
quarter), non-interest income grew only by moderate 10.7%, leading to growth of
around 17% yoy in both operating income and pre-provisioning profits. On the
asset quality front, the bank reported stability, as its Gross and Net NPA
levels, on an absolute basis, came down sequentially by around 4% each, which
aided it to report 27% yoy lower provisioning expenses and clock earnings
growth of 30% yoy. The bank registered a robust growth in its balance sheet,
with net advances and deposits growing at 22.7% and 20.1% yoy. On the deposits
front, the current and saving deposits accretion was healthy, growing at 15.2%
and 19.2% yoy, respectively. CASA ratio declined by around 100bp on a yoy basis
to 47.4%. Within loan book, the bank manage to grow its retail loan book by
27.3% yoy and hence, share of retail advances to overall loan book
increased by around 200bp yoy and 300bp qoq to 56.9%. NIMs for the bank
came in at 4.5%, higher by 20bp qoq and 10bp yoy, primarily on higher
retail lending. Non-interest income (excluding treasury) grew at
subdued pace of 2.3% yoy, as fee income growth came in moderate at 10.8%
and income from exchange transactions declined by 38.1% yoy. The bank
reported treasury gains of `65cr for the quarter compared to a loss of
`72cr in 4QFY2012. On asset quality front, the bank reported stability, as
its Gross NPA ratio improved marginally by 5bp to 0.97%, while Net NPA
ratio remained flat at 0.2%. PCR (excluding write-offs) for the bank
remained stable sequentially at 79.9%. HDFC Bank is currently trading at
one-year forward 3.8x P/ABV (3.3x FY2015E ABV), higher than its median of
3.5x (over FY2005-13). We believe the current valuations largely factor in
the positives, leaving limited upside in the stock. Source: Angel
Broking
Axis Bank
During 4QFY2013, Axis Bank reported a 21.8% yoy growth in its net
profit, which was in-line with our estimates. Key highlights from the result
were sequential improvement in NIMs, robust growth in fee income and stable NPA
ratios. During 4QFY2013, the bank reported a healthy growth in business, with
advances and deposits registering a growth of 16.0% and 14.8% yoy,
respectively. Growth in the loan book was primarily on account of strong
traction witnessed in the retail loan book, which grew by 43.6% yoy, while SME
loans grew at a robust pace of 25.7% yoy. Within retail loan book, auto loan
grew by 54.7% yoy and now constitute around 4% of total loan book. Growth in
the large and mid-corporate segment remained moderate at 7.5% yoy. CASA
deposits grew at a healthy pace of 22.6% yoy, aided by a robust growth of 23.4%
and 21.6% yoy in savings deposits and current deposits, respectively. Overall,
the reported NIM improved by 13bp qoq to 3.7%. The bank registered robust
growth in its non-interest income excluding treasury, largely driven by a
healthy growth in fee income from the Retail & SME segments. On the asset
quality front, slippages came in lower sequentially at `398cr, compared to
`541cr witnessed in 3QFY2013, however, slippages and fresh restructuring, taken
together amounted to ~`1,200cr during the quarter, higher than the
Management’s guidance of around `1,000cr. Going forward, the Management
expects slippages and restructuring per quarter to remain at
similar levels for the next few quarters. Along with sequentially lower
slippages, the bank also reported sequentially higher recoveries and
upgrades at `205cr, which helped it to contain the sequential increase in
its gross and net NPA levels, on an absolute basis, to 5.2% and 3.7%,
respectively. The gross and net NPA ratio remained stable sequentially at
1.06% and 0.32%, respectively. The bank’s PCR dipped by 200bp qoq to 79%.
Of the total restructuring during the quarter (`791cr), nearly `500cr came
from Engineering and Iron & Steel. Its total restructured book, as of
4QFY2013 stands at `4,368cr. Axis Bank is trading at 1.6x FY2015E ABV –
more than 50% discount to HDFC Bank vs an average discount of around 38%
over the past five years (which we believe over-discounts asset quality
concerns). We remain positive on the bank, owing to its attractive CASA
franchise, multiple sources of sustainable fee income and reasonable
growth outlook. Source: Angel Broking
No comments:
Post a Comment