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Informist, Tuesday, Jul 16, 2024

 

--Moody's affirms HDFC Bank's Baa3 deposit ratings, outlook stable

--Moody's: HDFC Bank rating shows India's positive operating environment 
--Moody's: HDFC Bank's asset quality will remain broadly stable

--Moody's: HDFC Bank asset quality to stay stable on diversified portfolio

--Moody's: HDFC Bank asset quality to stay stable on strong risk management

 

MUMBAI – Moody's Ratings today affirmed the Baa3 rating on HDFC Bank's long-term deposits and maintained the "Stable" outlook, saying it reflects India's favourable operating environment, which offers the bank an opportunity to further strengthen its market position.

 

The global rating agency said the bank's diversified loan portfolio and above-industry-average profitability will support its internal capital generation and strong solvency. "In addition, its strong retail franchise, access to low-cost deposits and sufficient holdings of liquid government securities will support its funding and liquidity," Moody's said. 

 

Moody's said healthy net interest margin, diversified non-interest income, operational efficiencies and through-the-cycle low credit costs support the bank's above-industry-average profitability.

 

The rating agency noted that the bank's profitability has declined post its merger with parent Housing Development Finance Corp Ltd last year because of the latter's lower net interest margin as a mortgage financier with lower asset yields and higher funding costs. "Nevertheless, its profitability will improve over the next few years as it replaces high-cost wholesale funding with deposits and recoups the share of low-cost current and savings accounts in its total deposit base," Moody's said.

 

In the near-term, HDFC Bank's margin will likely be rangebound because of competition on the lending and deposit side, Moody's said.

 

The rating agency said HDFC Bank's asset quality is expected to remain broadly stable, supported by India's healthy economic momentum and the bank's diversified loan portfolio and strong risk management.

 

HDFC Bank's gross and net non-performing assets ratio was 1.27%, lower than the system-wide gross NPA ratio of 2.8% as of Mar 31.

 

On the National Stock Exchange, shares of HDFC Bank closed 0.1% lower at 1,619.75 rupees.  End

 

Reported by Richard Fargose

Edited by Ashish Shirke

 

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