HDFC Bank net profit grows 20%

HDFC Bank, country’s second largest private sector lender, reported a 20 per cent growth in net profit to ~3,238.9 crore in the April-June quarter, led by a higher net interest income and other income.

The net profit was in line with Bloomberg estimates at ~3,275.40 crore. Net interest income — difference between interest earned and interest expended — grew by 21.8 per cent to ~7,781.4 crore. The rise in interest income was led by a strong growth in advances at around 20 per cent.

The management explained that the uptick in advances was recorded both in the retail and wholesale segment. In the retail segment, advances were higher in personal loans and credit card, whereas on the corporate side, growth was led by working capital and medium term loans. The domestic loan mix between retail and wholesale at the end of the June quarter was at 53:47.

Other income that includes fees treasury gains etc., grew by 14 per cent to ~2,806.6 crore, mainly led by the growth in fees and commissions. Though asset quality remained largely stable, the bank saw a slight uptick in bad loans in retail, agri and the business banking segment.

The gross non-performing assets (NPAs) increased to 1.04 per cent of gross advances at the end of quarterended June, as compared to 0.95 per cent a year ago. In the same period, Net NPAs increased to 0.32 per cent from 0.27 per cent. At the end of June quarter, the restructured advances were at 0.1 per cent of gross advances. With the rise in bad loans, provisions also increased by 30.84 per cent to ~866.73 crore, as compared to the corresponding quarter a year ago.