The firm reported a sharp deterioration in asset quality and sluggish loan growth.
Keki Mistry, Chief Executive Officer (CEO) of HDFC, on May 26 said that the company's non-performing loans (NPLs) would come down as normalcy returns, after the firm reported a sharp deterioration in asset quality and sluggish loan growth.
"There are three-four new accounts, which we have classified as non-performing assets (NPAs) in this quarter, I don't want to give any names. Out of that, there are two accounts which were not really NPLs – in the sense that they are not 90-day outstanding but we saw a lot of stress in those accounts and therefore we have voluntarily downgraded those accounts," he said.
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"So if you remove these two accounts and go strictly by the '90-day' definition, then the gross NPLs would have been 1.7 percent as opposed to 1.99 percent,” said Mistry.
"We have had shocks to the system in the past also. In 2013, 2008-2009, 2002-2003 and many instances we can recall. At times like these, NPLs do tend to inch up. Our experience again over the years is that once you get to a reasonable degree of normalcy, NPLs again start going downwards," he added.
Source: CNBC-TV18
