HDFC Bank- we understand your world

I think I understand it now after looking at Q1FY24 presentation and the transcript of the Q1FY24 conference call.

1. Expected temporary slow down in growth of the combined entity: Growth in ‘Proforma merged gross advances’ is shown as 13% whereas banks pre-merger growth is at 20% (On slide 23). However, management commentary in the conference call is to continue doubling the loan book every 4 to 5 yrs as done in past by growing at the rate of 17~18%.
2. Ongoing pruning of non-individual loans inherited from HDFC: Reduced by 18% in last 1 Yr. Right now, left over book value is at INR 1097 billion. Management is still evaluating to decide further course of action for further downsizing.

Above two factors indicate that the merged entity’s loan growth [earnings] would be under pressure compared to the norm of 17~18%.