HDFC Bank, in its first earnings report since merging with Housing Development Finance Corp (HDFC), announced a net profit of Rs 15,976.11 crore for the July-September quarter, marking a remarkable year-on-year increase of just over 50%. On a sequential basis, the net profit demonstrated a significant rise of 33.7%, surpassing the brokerage estimates.
This surge in net profit can be attributed to improved net interest income and net revenue. The bank’s net interest income for the quarter rose over 30% year-on-year to reach Rs 27,385 crore, while net revenue saw a 33.1% increase to reach Rs 38,093 crore in the second quarter of the current fiscal year.
HDFC Bank reported a net interest margin (NIM) of 3.4% on total assets in the July-September quarter. The impact of I-CRR on NIMs was estimated to be around 5 to 10 basis points, and the bank made specific decisions on liquidity management during this period.
However, there was a slight deterioration in the asset quality of the bank, with gross non-performing assets (NPA) increasing to 1.34% in the reporting quarter, up from 1.23% a year ago and 1.17% in the previous quarter. In absolute terms, the gross NPA reached Rs 31,577.89 crore in the July-September quarter, compared to Rs 18,301.00 crore a year ago.
The net NPA ratio stood at 0.35% in the July-September quarter. The increase in NPA was attributed to the non-individual book of the erstwhile HDFC Ltd., resulting in around 22 basis points of impact, equivalent to approximately Rs 4,000 crore to Rs 5,000 crore in absolute terms.
