 "HDFC Bank Q3 results: Net profit rises 2% to Rs 16,736 cr, NII up 7.7%")
HDFC Bank, the largest private sector lender of the country, on Wednesday reported a 2.2 per cent increase in net profit to Rs 16,735.50 crore for the third quarter of the current financial year (Q3FY25) amid slower growth in core income and higher slippages from agricultural loans.
Its net interest income (NII) — the difference between interest earned and interest expended — was up 7.7 per cent year-on-year (Y-o-Y) to Rs 30,650 crore while other income was almost flat at Rs 11,450 crore. Mark-to-market gain on investments fell to Rs 70 crore as compared to Rs 1,470 crore during Q3FY24.
Net interest margin (NIM) was 3.43 per cent for Q3, flat as compared to the same period last year but lower than 3.5 per cent for Q2.
Provision and contingencies fell to Rs 3,150 crore as compared to Rs 4,220 crore in Q3FY24.
Asset quality deteriorated with gross non-performing assets (NPA) increasing to Rs 36,019 crore as compared to Rs 34,251 crore in the previous quarter and Rs 31,012 crore during Q3FY24. The gross NPA (GNPA) ratio was 1.42 per cent at the end of December 2024, as compared to 1.36 per cent in end-September and 1.26 per cent a year ago.
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“This (GNPA) includes the impact of the agricultural sector, which is seasonal between the rabi and kharif crop and gets impacted in December. GNPA excluding agri was 1.19 per cent, remaining flat at what it was in the prior quarter,” said Srinivasan Vaidyanathan, chief financial officer (CFO) at HDFC Bank, during the post-earnings media call.
Slippages during Q3 was Rs 8,800 crore; excluding agri, it was Rs 6,500 crore. ALSO READ: HUL Q3FY25 results: Net profit rises 19% to Rs 2,984 cr, revenue up 2%
Net NPA ratio also increased to 0.46 per cent from 0.41 per cent in September and 0.31 per cent in the year-ago period.
Gross advances were at Rs 25.4 trillion as of December 31, 2024, an increase of 3 per cent over December 31, 2023. Retail loans grew by 10 per cent, commercial and rural banking loans rose by 11.6%, and corporate and other wholesale loans fell by 10.4%.
“The retail-wholesale mix is about 58:42 right now. The biasness is towards retail because that is where investments have gone. Wholesale is important. It is extremely price-sensitive. The spreads are very tight,” Vaidyanathan said.
Total deposits were at Rs 25.6 trillion as of December 31, 2024, an increase of 15.8% over December 31, 2023.
CASA (Current Account Savings Account) deposits grew by 4.4%, with savings account deposits at Rs 6.05 trillion and current account deposits at Rs 2.6 trillion. CASA deposits comprised 34.0% of total deposits as of December 31, 2024.
Liquidity coverage ratio fell to 125 per cent from 128 per cent in the September quarter.
Vaidyanathan said the credit-deposit (CD) ratio of the bank was 98 per cent. While the bank has been consciously growing loans at a slower pace, from FY27, it has plans to better loan growth than the industry.
“Traditionally, the bank has operated between 85 per cent and 90 per cent (CD ratio). So, we want to get into that level. About a year ago, we thought we would get to that level in four to five years. But as we evolved and as we found in the market, overall credit growth in the market was coming down, so we took the opportunity to accelerate the reduction in the loan growth. There is no change in deposit growth,” he said.
“This financial year, we will be growing at a rate which is lower than the system. Next financial year we will grow in line with the system. And in FY27, we will grow higher than the system, thereby capturing the market share that we used to capture in the past,” he added.
HDFC Bank shares ended 1.12 per cent higher at Rs 1,665.05 apiece at the BSE while the broader indices were up 0.75 per cent.