In a thumbs up to the country’s largest private sector lender, S&P Global Ratings on Tuesday said that HDFC Bank has sufficient financial headroom to withstand downside risks from tough operating conditions in India.
The bank’s results for the first half of fiscal 2021 (ending March 31, 2021) were resilient and in line with expectations, it further said.
HDFC Bank posted an 18.4 per cent growth in its net profit in the second quarter of the fiscal year.
“We expect HDFC Bank’s growth and earnings to significantly outperform peers’,” S& P Global Ratings said, adding that the bank’s loan book grew a robust 16 per cent year-on-year in the first half of fiscal 2021 driven by wholesale loans.
HDFC Bank is likely to grow faster than the industry by tapping underserved retail and small and midsize enterprise borrowers in semi-urban and rural areas and by increasing its share in working capital loans of high-rated corporates, it further said, adding that its domestic market share may cross 10 per cent in coming quarters.
HDFC Bank’s asset quality should also remain superior to the industry over the next two years, despite a likely deterioration from the Covid-19 fallout, S&P Global Ratings said.