InvestorQ : How serious is the bad loans problem at HDFC Bank in the Jun-21 quarter?
Lavanya Subramanian made post

How serious is the bad loans problem at HDFC Bank in the Jun-21 quarter?

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Anamika Sodhani answered.
5 months ago
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The numbers of HDFC Bank for the Jun-21 quarter would have looked like any normal quarter had it not been for the sudden and unprecedented spike in bad assets. That was the big story about HDFC Bank results in the Jun-21 quarter. The total amount written off in the quarter more than doubled to Rs.3,100 crore in the Jun-21 quarter. To improve credit profile, HDFC Bank got rid of NPAs worth Rs.1,800 crore against just Rs.1,000 crore last year.

HDFC Bank has taken pains to underline that the slippages were elevated purely due to COVID 2.0 preventing employees from going to the field for collections. However, the worry is that much of the pressure could have come from the retail book, where HDFC Bank literally predominates the industry. Gross NPAs in the Jun-21 quarter were sequentially up by 15 bps at 1.47%. This is still a reasonable level of stress, although higher than estimates.

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