HDFC Bank Q1 Net Profit Up 19% On Higher Core Income

Udaipur : Indias largest private sector lender HDFC Bank saw its net profit for the quarter ended June 30 rise 19% on a year-on-year basis on higher net interest income and lower provisions.

Net profit for the bank rose to Rs 9,196 crore, compared with Rs 7,730 crore a year ago. Analysts polled by Bloomberg estimated a net profit of Rs 8,197 crore for the quarter.

Net interest income, or core income, stood at Rs 19,481 crore, up 14.5% from last year. The bank’s core net interest margin was at 4% of total assets.

Other income rose a marginal 1.6% year-on-year and stood at Rs 6,388 crore. The low growth in other income was on account of a loss on sale and revaluation of investments of Rs 1,312 crore, according to the bank’s press release. Other income, excluding trading and mark-to-market losses, grew 35.4% over a year ago, the bank said.

The hit to treasury income was on account of rising interest rates, the bank’s management said.

Asset Quality

Asset quality for the bank was stable with its gross non-performing asset ratio rising to 1.28% as of June 30, compared with 1.17% as of March 31. The net NPA ratio was at 0.35% as of June 30, compared to 0.32% a quarter ago.

Provisions during the quarter stood at Rs 3,188 crore, down 34% from a year ago.

The bank said it holds floating provisions of Rs 1,451 crore and contingent provisions of Rs 9,630 crore. Total provisions were 170% of gross non performing assets.

Business Growth

Total advances at the end of the first quarter stood at Rs 13.95 lakh crore, up 21.6% on a year-on-year basis.

• Retail loans grew 21.7%
• Commercial and rural banking loans rose 28.9%
• Corporate and other wholesale loans rose 15.7%

Retail growth has been slowing strengthening, said Srinivasan Vaidyanathan, chief financial officer of HDFC Bank on a conference call. Excluding the vehicle segment, which has remained weak, retail loans grew 25% year-on-year, he said. “Credit cards are also seeing very strong growth in spends, driven by discretionary spends,” Vaidyanathan added.

Total deposits for the bank rose 19.2% year-on-year and stood at Rs 16.05 lakh crore. CASA deposits rose 20.1%, taking the share of low cost deposits to 45.8%