HDFC Bank shares drop over 2%
The share price of HDFC Bank fell more than 2 per cent to a low of Rs 711.70 on the NSE. The private lender’s deposits, which surged 18.8 per cent, are growing faster than its loans, up 16.3 per cent for the quarter. That means it is paying for funds that are not yet earning a full return, which hurts margins. Also, the bank’s provisions are not falling much. HDFC’s provisions rose 2.1 per cent. This means credit costs are not easing, which leaves little room for profit to improve even if loans keep growing.