19 July 2020 HDFC Bank (HDFCB) reported mixed trends in advances growth. While corporate growth was robust at ~38% YoY, retail loan growth declined sequentially. Operating performance remained steady, led by strong NII growth and tight control on opex. In contrast, fee income declined sharply due to the economic slowdown. However, higher treasury gains supported other income. Maintain HDFCB reported a steady quarter with PAT growth of ~20% YoY (-4% QoQ), supported by NII growth of 18% YoY (+3% QoQ) and controlled opex, which declined 3% YoY (-17% QoQ). The strong NII growth was led by advances, which increased 21% YoY and stable margins of 4.3% QoQ. Fee income declined 37% YoY, impacted by the slowdown in economic activity due to the COVID-19 outbreak. While the pandemic led to a decrease in fees/other income by ~INR20b, treasury gains were higher at INR10.9b (+92% QoQ).