India's HDFC Bank Posts 20% YoY Jump in Q3 Net Profit

India's largest private lender HDFC Bank on Saturday reported a 20% jump in net profit for the September quarter of this fiscal, buoyed by higher loan growth and growth in other income.

Net profit rose to Rs 106.05 billion, beating estimates. According to data from Refinitiv IBES, analysts were expecting a profit of Rs 105.97 billion.

Net interest income, the difference between interest earned and paid, stood at Rs 210.21 billion, a jump of 18.9%.

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Other income increased 16.7% due to improvements in fees and commissions and improved foreign exchange and derivatives revenues.

Advances with the bank grew by 23.4%, given the high pace of growth across sectors including retail, commercial and rural banking and even corporate and wholesale lending.

Within retail loans, two-wheeler advances saw a marginal decline with total advances in the segment at Rs 95.97 billion as compared to Rs 97.13 billion a year ago.

Deposits grew by 19%, much higher than the industry-wide growth with growth seen in both fixed deposits and current and savings account deposits.

India's credit growth was at a multi-quarter high of 16.4 per cent year-on-year on September 23, according to central bank data. CARE Ratings said lower base, higher retail credit, increase in working capital requirement amid high inflation has helped drive credit growth.

Meanwhile, deposit growth across the industry has been comparatively slow at 9.2%, as per the latest data.

HDFC Bank's core net interest margin, a key indicator of the bank's profitability, stood at 4.3%.

The lender's asset quality also improved sequentially, with gross non-performing assets at 1.23% compared to 1.28% in the June quarter. Net NPAs also showed improvement and declined by 2 basis points during the same period.

Total provisioning rose marginally to Rs 32.40 billion in the September quarter, as against Rs 31.87 billion in the June quarter.

The bank's overall credit cost ratio stood at 0.87% as compared to 1.30% for the quarter ended September 2021.

The bank is well capitalized with a capital adequacy ratio at 18%.

Source: Reuters