HDFC Bank, the country's second largest private sector lender, has reported stable set of quarterly earnings on Friday as profit grew by 18.2 percent year-on-year to Rs 3,990 crore in the quarter ended March 2017. Non-interest income, operating profit and better-than-expected net interest income boosted earnings but sharp spike in provisions limited growth.
Net interest income, the difference between interest earned and interest expended, increased higher-than-expected 21.5 percent to Rs 9,055 crore compared with Rs 7,453.3 crore reported in corresponding quarter of last fiscal, aided by average assets growth of 19 percent and core net interest margin of 4.3 percent (against 4.1 percent QoQ).
The bank said total deposits surged nearly 18 percent to Rs 6.43 lakh crore as on March 2017, with current account deposits rising 30.7 percent (at Rs 1.15 lakh crore) and savings account deposits up 30.9 percent (at Rs 1.93 lakh crore).
CASA deposits were at 48 percent of its total deposits at the end of March 2017.
Other income or non-interest income during the quarter grew by 20.2 percent year-on-year to Rs 3,446.3 crore and operating profit jumped 27 percent to Rs 7,279.4 crore, HDFC Bank said in its filing.
Cost-to-income ratio for the quarter was 42.4 percent against 44.9 percent in same quarter last fiscal, it added.
Profit was expected at Rs 3,966.6 crore and net interest income at Rs 8,684.4 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
Provisions for bad loans increased sharply in January-March quarter, by 90.5 percent year-on-year and 76.3 percent quarter-on-quarter to Rs 1,262 crore, which consisted of specific loan loss provision of Rs 977.9 crore and general provisions of Rs 280.3 crore, the private sector lender said.
"The specific loan loss provisions for March quarter included provisions on accounts that would have turned non-performing in previous quarter, but were classified as NPA during the quarter, in line with additional 60/90 days dispensation provided by the RBI," the bank explained.
Asset quality was stable during the quarter as gross non-performing assets were unchanged at 1.05 percent and net NPA rose 1 basis point to 0.33 percent compared with previous quarter.
In absolute terms, gross NPA increased 12.5 percent sequentially to Rs 5,885.6 crore and net NPA jumped 17.88 percent to Rs 1,844 crore in the quarter ended March 2017.
HDFC Bank said the board of directors today has approved dividend of Rs 11 per share.
Capital adequacy ratio at the end of March quarter stood at 14.6 percent against 15.5 percent as of March 2016 and 15.9 percent as of December 2016.At 13:43 hours IST, the stock was quoting at Rs 1,479, up 1.17 percent after hitting a life high of Rs 1,479 amid high volumes on the BSE.