Chillin' out till it needs to be funded
Both the private sector efforts that have taken the last decade of All India growth under their ownership having influenced governments and banks and slipped on roughshod retail portfolios without rhyme or reason, have reported they are still banks, pulling out their entire March 15 bag of tricks to report 33% jump for the Quarter for ICICI Bank and 33% jump for the full year for HDFC Bank.
India’s overall credit targets have been met with AAA borrowers getting the feed in the last fortnight of the year, making up for a trillion INR in gap in credit disbursal targets. As earlier, HDFC has touted its cohesive leadership and people skills for a better performance in retail lifestyle segments, continuing with INR 50 B in the last quarter in unsecured loans and mortgages. ICICI has dropped in interest income in the 4th Quarter while HDFC Bank reported a jump of 27% for the full year to INR 23.5B. ICICI Bank also showed results of its blocking of retail disbursals with NPAs staying at 2.12% (1.87% according to release)
HDFC Bank’s leadership in retail is hindered by its coyness in increasing its ATM presence while it leads in non metro markets with 32% of deposits and 47% of loans from its 2000 branches outside the metros, supported by only 3000 ATMs NIM is floating at 4.2% dspite the significantly higher CASA ratio ( >45%) ICICI Bank has reported the latest CASA of 42% from an abysmal 29% in FY 2009 mainly by reducing its debt issue overhang
HDFC Banks cost of deposit s has been significantly higher at almost 6% compared to SBI which has reported 5.2% as abnormally high for 2010
ICICI profits of $1.15 B for the full year over 900m in FY2009 underline its inability to file in the big league globally. they also improved fee income to $380m in Q4 and reduced provisions by a $25 m ( We use dollar translations in same currency terms at INR40 to the Dollar) for our analysis). The banks total deposits stand at $50 billion or INR 2 Trillion and advances at INR 1.81 T or $45B with Tier I Capital of 14% and BAsel II Capital at 19.6% after losing 10% on the loan book. The forward looking statements on credit growth underline hesitancy of the management to commit expected to outperform its 16-20% target by 40-50%
HDFC Bank has reported full years profits of INR837 Crs or $209M coasting on a Net Interest Margin of 4.4% and much higher NII at $630M of INR 2750 Crs up 16-20% from last year HDFC expects loan growth to be in line with deposit growth ( CASA off 50%) and seemingly expressing optimism ontheir frayed credit cards franchise. ICICI Bank full year net profit of $1.15 B is still almost twice the size of $750 M ( INR2948CR) for HDFC Bank that is a 30% improvement over 09. HDFC Bank’s Q4 Profits of $210M are also a 30%+ improvement over last year. HDFC Bank outgrew others with a Corp Loan book rise of 40% and expects to lead insustry in credit growth also in 2011. Net NPAs are a ever low 0.3%