HDFC Bank profit jumps 30% on lower provisions
MUMBAI : HDFC Bank Ltd, India’s largest private sector lender, reported a 30% increase in net profit driven by lower provisions for loan losses and increased other income. The bank’s first-quarter results, however, do not include the earnings of the merged entity, as the merger between HDFC Bank Ltd and its parent company, Housing Development Finance Corp. Ltd (HDFC), took effect on 1 July.
The bank beat analysts’ expectations overall, despite a sequential miss in asset quality and net interest income. The bank’s net profit rose to ₹11,951.7 crore for the quarter ended 30 June from ₹9,196 crore in the year earlier, it said on Monday. Net interest income (NII) increased 21.1% to ₹23,599.1 crore from ₹ 19,481.4 crore in the previous year.
The core net interest margin (NIM) was at 4.1% on total assets and 4.3% based on interest-earning assets. Other income grew 28.1% in the June quarter to ₹9,230 crore from ₹6,388 crore in the year earlier. Provisions and contingencies for the fiscal first quarter fell to ₹2,860 crore from ₹3,188 crore in the year-ago period.
HDFC Bank’s asset quality declined sequentially during the quarter ended 30 June. Its gross non-performing assets (NPA) increased 5.7% sequentially to ₹19,064.1 crore at the end of June quarter from ₹18,019 crore during the previous quarter. Its net NPAs rose 9.3% sequentially to ₹4,776.9 crore at the end of the first quarter from ₹4.368.4 crore in the previous quarter.
As a percentage of total assets, gross NPA stood at 1.17% at the end of the June quarter as against 1.12% in the previous quarter. Growth in its advances book also slowed to 0.9% from the preceding March quarter and 15.8% from the year earlier to ₹16.15 trillion. Chief financial officer Srinivasan
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