HDFC Bank shares are falling mainly due to low profit margins, a heavy merger burden, and slower cheap deposit growth.
Key Fundamental Reasons
- The Merger Impact: The 2023 merger with HDFC Ltd added many low-interest home loans and expensive borrowings to the bank balance sheet.
- Falling Margins (NIM): Net interest margins dropped to a low of 3.26% because the cost of raising money became higher than what the bank earns from loans.
- Less Cheap Money (CASA): Customers moved their savings into fixed deposits, reducing the cheap money available for the bank to lend profitably
Disclaimer: Financial information provided is for educational purposes only; this AI-generated content is not professional investment advice.
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