Economy to grow at 'fair clip' in near term: Atanu Chakraborty
New Delhi: HDFC Bank's Chairman Atanu Chakraborty on Saturday said the Indian economy is expected to recover from the impact of COVID-19 pandemic aided by the progress in the pace of vaccination. "As, number of active cases come down and vaccination gathers pace, we estimate India's economy to grow at a fair clip in near and medium term," he said on Saturday at the bank's annual general meeting (AGM).
This is Chakraborty's first AGM as HDFC Bank Chairman. In April this year, the RBI approved the appointment of Chakraborty as the new Chairman of the bank.
The appointment for a period of three years came after the the exit of previous chairperson, Shyamala Gopinath in December 2020. Chakraborty is a 1985 batch Gujarat cadre IAS officer.
HDFC Bank has seen major changes at the top last year. Aditya Puri, the managing director of the bank for the last 26 years, retired in October handing over the baton to Sashidhar Jagdishan for the top job at the bank. Along with this, there have been a series of changes at the top level, Moneycontrol reported.
Chakraborty said the economy was hit by multiple waves of the pandemic that has induced a general risk- aversion. "That has translated into lower discretionary spending by people, at large. This coupled with mobility restrictions has impacted the aggregate demand, which is quite unlike regular boom and bust cycles," Chakraborty said.
Chakraborty said the bank has created a new business segment of commercial (MSME) and rural banking to capture the next wave of growth. "This will not only reinforce the Bank's top position in the MSME segment but also strengthen efforts to serve customers in both India and Bharat and even consumer segments like the tech savvy and Millennial, going forward,"he added. The creation of this vertical is under the 'future ready' project of the bank.
The delivery channels will be complemented with digital marketing, even as the bank leverages the branch channel and virtual relationship channel, the Chairman said.
Chakraborty apologised to the bank's customers "for the times when we have not been able to live up to customers' expectations," and said going ahead the bank's primary goal is serving the customer, "with utmost humility, care and efficiency." This comment assumes significance in the context of technological challengesbeing faced by the bank.
Following multiple digital outages, the RBI had banned the HDFC Bank in December 2020 from launching new digital products, which stays even now.
HDFC Bank, on Saturday, reported a 16.1 per cent year-on-year growth in standalone profit at Rs 7,729.64 crore for the quarter ended June 2021 despite elevated provisions. Higher other income and pre-provision operating profit along with NII supported profitability. The bank reported a profit of Rs 6,658.62 crore in Q1 FY21.
Net interest income, the difference between interest earned and interest expended, grew by 8.6 percent to Rs 17,009 crore compared to the year-ago quarter, with loan growth of 14.4 percent and a core net interest margin of 4.1 percent. Deposits, at Rs 13.45 lakh crore grew, by 13.2 percent on a year- on-year basis.
Provisions and contingencies for the quarter ended June 2021 were at Rs 4,830.8 crore (including contingent provisions of Rs 600 crore), against Rs 3,891.5 crore for the same quarter last year, and Rs 4,693.7 crore in March quarter 2021.
The total credit cost ratio came at 1.67 per cent, as compared to 1.64 per cent for the quarter ending March and 1.54 per cent for the quarter ending June 30, 2020, as the second wave of COVID-19 disrupted business activities for close to two-thirds of the quarter.
The bank, which is the first to report numbers for the quarter, said the gross non-performing assets ratio increased to 1.47 per cent as of June 30, up from the 1.32 per cent in March and 1.36 per cent in the year-ago period, and net non-performing assets were at 0.48 percent against 0.40 percent.
Menwhile, speaking at the bank's AGM, Atanu Chakraborty said the largest lender in the private space is on its way to scale technology adoption and transformation agenda through scaling infrastructure, disaster recovery resilience, information security enhancements and having a monitoring mechanism.
