HDFC Bank Q3 net up 20% at Rs 3,357 cr

Higher other income, net interest income contribute to upside

HDFC Bank, the second —largest private lender, has reported a 20 per cent growth in net profit in the October — December quarter to Rs 3,356.8 crore. The increase in profit came on the back of a higher other income and net interest income.

Net interest income grew 24 per cent to Rs 7,068.5 crore, against Rs 5,699.9 crore in the corresponding quarter of FY15.

Other income for the bank, which includes fees, commissions, forex gains etc., grew by 13.3 per cent in the quarter ended December to Rs 2,872.2 crore, compared with Rs 2,534.9 crore in the third quarter of FY15.

The lender witnessed some concerns on asset quality with gross non-performing assets (NPAs) increasing on a sequential basis to 0.97 per cent from 0.91 per cent in the quarter ended September. In the same period, net NPA also increased to 0.29 per cent from 0.25 per cent. At the end of the October-December quarter in FY15, gross NPA and net NPA stood at 0.99 per cent and 0.26 per cent, respectively.

Paresh Sukthankar, deputy managing director, said the lender did see some slippages from the agri business and business banking verticals.

“We have had no new bad loans recognition as a result of the systemic review carried out by the Reserve Bank of India. However, there was some minor increase in provisioning that we had to undertake as a result of it, as the account was already into NPA.”

The provisions and contingencies for the quarter was Rs 653.9 crore (consisting of specific loan loss provisions of Rs 601.5 crore, general provisions of Rs 49.9 crore and other provisions of Rs 2.5 crore) against Rs 560.4 crore (consisting of specific loan loss provisions of Rs 487.6 crore, general provisions of Rs 62.2 crore and other provisions of Rs 10.6 crore) for the corresponding quarter a year ago.

Deposits grew 26.5 per cent to Rs 5.23 lakh crore and advances grew 25.7 per cent to Rs 4.36 lakh crore at the end of the quarter. Growth in advances was led by retail loan growth at 29.2 per cent followed by growth in wholesale business at 18.9 per cent. The loan mix between retail and wholesale was 53:47.

“It was a challenging quarter of credit and deposit growth for the industry with both hovering around the 10 per cent levels. However, we have still managed to outpace the system growth while maintaining our margin and asset quality. The environment still remains challenging and so we have to be cautious on what happens on the wholesale side,” Sukthankar said.