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HDFC bank Q1 net profit up 20%; misses estimate as bad loan rise

HDFC bank net profit rose to Rs 3,894 cr in Q1, versus Rs 3,239 crore a year ago


The headquarters of India's HDFC bank is pictured in Mumbai, India
The headquarters of India's HDFC bank is pictured in Mumbai, India

HDFC Bank, India's second-biggest lender by assets, reported a slightly smaller-than-expected 20 per cent rise in quarterly net profit, hurt by higher provisions for bad loans.

Indian are battling slower loan growth as companies are yet to restart projects they stalled during an economic downturn. have also been hit by higher provisions and regulatory scrutiny as bad loans in the sector reached a record $150 billion last December.

HDFC Bank's provisions, including for bad loans, surged nearly 80 per cent to Rs 1,559 crore($241.93 million) in the first quarter ended June 30, India's most-valuable bank said on Monday. Provisions for specific loan losses rose about 61.4 per cent to Rs 1,343 crore.

rose to Rs 3,894 crore in the quarter ended June 30, versus Rs 3,239 crore a year ago, but missed an average estimate of Rs 3,938 crore from 21 analysts polled by Thomson Reuters.

Gross non-performing loans as a percentage of total loans hit 1.24 per cent at end-June, from 1.05 per cent at end-March.

HDFC Bank, which has the lowest bad loans among India's leading banks, said 60 per cent of the total increase in gross non-performing assets was related to the agricultural sector.

Its net interest income rose 20.4 percent to Rs 9,371 crore, with a core net interest margin of 4.4 per cent.

Shares of the bank, valued at more than $68 billion, were up 1.6 per cent by 0713 GMT. The stock has risen over 40 percent this year, outperforming the main market index and the sector index.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, July 24 2017. 18:57 IST